Does Hawken persuade global corporations that the ecological principles of a restorative economy are good for their Business?

Question for Discussion: Do you think that Hawken's argument can persuade global corporations that the ecological principles of a restorative economy are good for their businesses and corporate bottomline?

Readings: Hawken, pp. 173-195; Hawken, "Basic Principles of a Sustainable Economy";
Hertsgaard, "The China Problem"

Video: DVD: China's Future 0-3:00, 10:00);
DVD: The Next Industrial Revolution (2008): Waste equals Food

Creaing Hope for the Future

Hawken, The Inestimable Gift of the Future
(in-class)
Finding Hope: Fear of Nuclear War in the early 1980s
(in-class)
The Tipping Point: How to start a Revolution
(in-class)
Hawken, Basic Principles of a Sustainable Society
The China Problem (in-class)
The United States Problem (in-class)
Hertsgaard, The China Problem and the Human Future (in-class)
EPA sees Toxic Waste Sites, Costs Growing
(in-class)
The Fortune 500 and Natural Capitalism (in-class)
The Growth of Hybrid Cars (in-class)
RMI: What is Natural Capitalism? (in-class)
Hawken: Fundamental Assumptions of
Natural Capitalism (in-class)
Hawken: Human Capitalism

Paths to a Restorative Economy

Hawken's Vision
Hawken: Natural Capitalism
Hawken's Vision of a Restorative Economy
A Roadmap for Natural Capitalism
Paul Hawken: Basic Principles of a
Restorative Economy
Paths to Naural Capitalism
What is Sustainable Development?
What is Economic Renewal?

Hawken's Writing

Daly on Sustainable Economics

Rocky Mountain Institute

Sustainable Economic Principles

The Natural Step and Factor Four

Natural Capitalism Consulting

The Example of Curitiba Brazil

Creating Hope for the Future

The 00's: A Decade from Hell - TIME:

Instead, it was the American Dream that was about to dim. Bookended by 9/11 at the start and a financial wipeout at the end, the first 10 years of this century will very likely go down as the most dispiriting and disillusioning decade Americans have lived through in the post–World War II era.
The 10 Worst Things About the Worst Decade Ever - Photo Essays - TIME
Gorbechez, We had our Perestroika
Biggest climate meeting in history begins
The Growth of Hybrid Cars (in-class)
The Tipping Point: How to start a Revolution (in-class)
Hawken, The Inestimable Gift of the Future (in-class)
Finding Hope: Fear of Nuclear War in the early 1980s (in-class)
Hawken, Basic Principles of a Sustainable Society (in-class)
World Population - Carrying Capacity - Learn More:

Using this approach, modern estimates for human carrying capacity have ranged from 1 or 2 billion people living in prosperity, to 33 billion people fed on minimum rations and using all suitable land for high-intensity food production. Many scientists now believe that the human carrying capacity of Earth may be approximately 12 billion.
We're Beyond Earth's Carrying Capacity Now
Ehrlich, Global change and carrying capacity - Stanford University (2011)
Daily Infographic: If Everyone Lived Like An American, How ManY EARTHS WOULD WE NEED
Hawken 2009 Commencement Address
Gore Pushes US and China to Act (in-class)
China blows by U.S. as world's largest car market -- DailyFinance
The China Problem (in-class)
Hertsgaard, The China Problem--the Numbers(in-class)
Hertsgaard, The China Problem and the Human Future (in-class)
The United States Problem (in-class)
List of countries by carbon dioxide emissions
Comparative Global Consumption of Natural Resources (in-class)
Private Per Capita Consumption: 1998
Comparative Population Growth 2000-2050 (in-class)
Toxic Air and America's Schools (2008)
EPA sees Toxic Waste Sites, Costs Growing (in-class )
The Fortune 500 and Natural Capitalism (in-class)
The Global Futures Project (in-class)
RMI: What is Natural Capitalism? (in-class)
Hawken: Fundamental Assumptions of Natural Capitalism (in-class)
Hawken: Human Capitalism

Hawken, The Inestimable Gift of the Future

"We have operated our world for the past few centuries on the basis that we could manage it, if not dominate it, without respect to living systems. We have sacrificed the harmonious development of our own cultures for enormous short-term gains, and now we face the invoice for that kind of thinking: an ecological and social crisis whose origins lie deep within the assumptions of our commercial and economic systems." (201)

"Some environmentalists have justifiably been criticized as complainers, focusing too much on excesses and blame. Business has completed this anxious symmetry by only seeing the worst in environmentalism, and by oversimplifying issues to play to the fears of the public. Thus, a critical basis for change and consensus is to find a way to introduce and discuss ecological principles in society in a manner that draws people together, rather than repelling or deterring them. This step is crucial, because within ecological principles reside not only the problems and challenges that face us, but also the solutions that can be used to transform our economy and society. Confusion or ignorance about these principles will not provide us comfort or protection from their implications. Underlying all ecological science is the inevitable fact that, given a chance, the earth will eventually restore itself." (203)

"It suggests we find a path of existence that honors both camps; that recognizes limits while using our innovative capacity to invent and re-imagine our world to increase efficiency, decrease harm, improve our existence. In other words, we need to create an economy and way of relating to our material world that is not an either/or argument, but a means to create the best life for the greatest number of people precisely because we do not know the eventual outcome or impact of our current industrial practices. In other words, we need an economy based on more humility." (205)

"Second, we take from other ecosystems by the importation of products and raw materials from different parts of the world. While we have stopped many damaging practices that affect our own environment at home, we are benefiting from the continuation of those same practices carried out by American or foreign companies overseas. In short, we are either buying or degrading other people 's environments and then consuming them for ourselves." (206)

"But in fact, the problem of carrying capacity lies not just with the obvious examples seen on our TV screens, but is worldwide. Those who argue that we need to grow our way out of ecological problems do not acknowledge a profound and troubling contradiction: If the population of China lived as well as the population of Japan or France or the United States, we would endure untold ecological devastation." (208)

"We may have already surpassed the point at which we can sustainably support the world's population using present standards of production and consumption. That disturbing possibility should impel us to seek, as sensibly and quickly as possible, an integration of our wants and needs as expressed and served by commerce, with the capacity of the earth, water, forests, and fields to meet them."
(209)

"Conversely, we have to look at how our present economic system consistently rewards short-term exploitation while penalizing long-term restoration, and then eliminate the ill-placed incentives that allow small sectors of the population to benefit at the expense of the whole. This should not be done through stifling restrictions, but through standards that release creativity and productivity. Ecological restoration can probably be carried out more naturally and surely by smaller enterprises than by larger, unwieldy corporations. The diversity of the small business sector of the economy must be encouraged, not by government loans, but through the revitalization and revisioning of incentives that will liberate the imagination, courage, and commitment that resides within small companies." (210)

"Industrialism is over, in fact; the question remains how we organize the economy that follows. Either it falls in on us, and crushes civilization, or we reconstruct it and unleash the imagination of a more sustainable future into our daily acts of commerce. Protecting our industries because we want to be pro-business and pro-jobs will have the same level of effectiveness as did the Soviet effort to maintain its industries in the 1970s and 1980s. You cannot protect a system that is rigid and entrenched without sacrificing the interests of the people it intends to serve. The thrust of a restorative economy will comprise two key issues. The first is to learn how much each of us can humanely take while we are on earth. The more of us, the less we can take, but on the other hand, the better we design our economy and commercial systems, the less we need." (212)

" It is time to clean out the closet, both conceptually and materially, and to reexamine our priorities and beliefs. We can 't wait until the guardians wake up, but that doesn't mean we shouldn't try to wake them up. We cannot wait for business to set a new course. We have to educate our businesses and, wherever appropriate, let them educate us. " (213)

"Living in a civilization that is profoundly and violently at odds with the natural world will not end overnight. But if there is to be an economy of meaning and purpose, it must have two agendas. It must serve and nurture the aspirations of the poor and uneducated, and it must also, as its underlying goal, seek to reconstruct, know, or revive genotypes, species, ecosystems, forests, vernal pools, allelomorphs, subspecies, grasslands, seral stages, reserves, natives, gradients, corridors, and habitat blocks." (214)

"We are starkly unfamiliar with the vocabulary of conservation biology or the science of restoration, both of which hold the key to our future on earth. It is not merely a question of stopping the cutting in the remaining ancient forests, it is literally the task of re-creating the ancient forests of the future. "Going forward" will someday mean replacing what has been lost, as well as returning what should not have been taken, not only in our forests and grasslands, but in our inner cities and rural backwaters as well." (214)

"We have a thousand years of work ahead of us--brilliant, sustaining, innovative work, a profound act of citizenship and participation that harmonizes the relationship between commerce and nature." (215)

"William McDonough, the architect and designer, echoed Henry Wallace, when, in the rotunda of the Jefferson Memorial in 1991, he called for a new declaration, not of independence, but of interdependence. A "Declaration of Interdependence" can guide and teach us, just as did the first Declaration, how to change our systems and practices so that we become an improved and better nation. Our environmental assemblies should result in such a declaration, and should arise from the people, as did the first. There are new truths that we hold self-evident, and they must be heard and spoken." (219)

Finding Hope: Fear of Global Nuclear
War in the early 1980s

"We deny the truth that is all around us. Indifferent to the future of our kind, we grow indifferent to one another. We drfit apart. We grow cold. We drowse our way toward the end of the world. But if once we shook off our lethargy and fatigue and began to act, the climate would change. Just as inertia produces despair -- a despair often so deep that it does not even know itself as despair -- arousal and action would give us access to hope, and life would start to mend: just just life in its entirety but daily life, every individual life. At that point, we would begin to withdraw from our role as both the victims and the perpetrators....We would no longer be the destroyers of mankind but, rahter, the gateway through which the future generations would enter the world."
........Jonathan Schell, The Fate of the Earth (1982)

[This passage is quoted by Hawken at the end of his
book, The Ecology of Commerce (1993) ]

The China Problem

"With 22 percent of the world's population,
China has only seven percent of its fresh water and cropland, three percent of its forests, and two percent of its oil. The combination of China's rapid economic growth and surging population is compounding the enormous environmental pressures it already faces."
.........U.S. Secretary of State Warren Christopher, 1996
..............................................................................................

Hertsgaard, The China Problem--the Numbers

China Population Clock (in-class)
World Population Clock (in-class)
U.S. Population Clock (in-class)
China Economic Growth: 1952-2003 (in-class)
China on course to become world's largest economy by 2016: OECD
China: Economic Miracle, Environmental Disaster (in-class)
China Cloud: U.N. Report sees New Pollution Threat (in-class)
China: World's largest polluter also leads clean-energy push
See: In Today's India, Status Comes with 4 Wheels (in-class)
....................................................................................

Hertsgaard, The China Problem and
the Human Future

"In 1996, China boasted five of the world’s ten most air-polluted cities (the ratio would increase to nine of ten by 1998), two million Chinese were dying every year from air and water pollution, and acid rain was affecting 20 percent of the nation's land area. Outsiders had cause for concern as well, for China’s coal burning had made it the world’s second-largest producer of the greenhouse gases that were causing global climate change."
(Hertsgaard, 1999)

"No, the biggest environmental problem is poverty--or, more precisely, the urge of billions of people to escape a level of poverty inconceivable to Americans. No one can begrudge the poor a better life, but the environmental consequences of their ascent from misery will be profound, particularly since most of the six billion humans now living on this planet are indeed distressingly poor. "

"Measured by population, Chinese outnumber Americans nearly five to one. Yet the United States dwarfs China’s total environmental impact because Americans consume fifty-three times as many goods and services per capita."
(Hertsgaard, 1999)

"It is an axiom of ecology that everything is connected to everything else, and perhaps nowhere is this more apparent than regarding climate change. With its huge coal reserves and ambitious development plans, China alone could doom the rest of the planet to severe climate change. Global sea levels are already expected, under “business as usual” projections, to rise an average of one meter by 2100, submerging large parts of not only Shanghai and Guangzhou but also New York, Washington, and San Francisco."
(Hertsgaard, 1999)

"Americans should therefore care a great deal about whether China triples or merely doubles its coal use over the next twenty years. And we should care even more about the behavior of our own nation, the world’s single largest source of ecological stress. "

"We humans want to save ourselves. The question is: Will we act in time? Ten years ago, experts began warning that humanity had to have environmental solutions by 2000 to avoid eventual catastrophe. Today, most environmental trends are instead still heading in the wrong direction, and some are accelerating. This makes it hard to be optimistic."
(Hertsgaard, 1999)

"China’s coal consumption was projected to double, if not triple, by 2020. All this will not only worsen the country’s acid rain and air pollution but also endanger the entire planet by accelerating global warming and ozone depletion."
(Hertsgaard, 1999)

"China’s large population and grand economic ambitions make it the single most important environmental actor on the global stage in the late 1990s, with the exception of the United States. Like the United States, China can all but single-handedly guarantee that climate change, ozone depletion, acid rain, and other hazards become a reality for people all over the world. Virtually every key aspect of the environmental issue— from population growth and greenhouse gas emissions to air and water pollution; from the ecological impacts of communism and capitalism to the role of public opinion and the potential of technological fixes—is in play in China. What happens in China, like what happens in the United States, is therefore central to one of the great questions of our time: Will the human species survive the many environmental pressures, crowding in on it at the end of the 20th century?"
(Hertsgaard, 1999)

"In short, how much of a danger did environmental hazards pose to the future well-being of the human species, and how was humanity faring in its struggle against these hazards? Would human civilization still exist one hundred years from now? Or would our species have been wiped out, partially or completely, by ecological disasters of its own making?"
(Hertsgaard, 1999)

"Of course, none of the ecological hazards in question threatened to end all life on earth —just human life. Newspaper headlines notwithstanding, it is not a question of “saving the planet.” It might take thousands or even millions of years for the earth to recover from such man-made catastrophes as runaway global warming or full-scale nuclear war, but that is barely the blink of an eye in geological time. Modern humans have inhabited this planet for only the last 200,000 years of its estimated five-billion-year life span; the earth could obviously exist perfectly well without us. The real question is whether humans will act quickly and decisively enough to save themselves."

The United States Problem

See: In Today's India, Status Comes with 4 Wheels

"The 50 million people who will be added to the U.S. population over the next forty years will have approximately the same global impact in terms of resource consumption as 2 billion people in India."
........................(Hawken, 161)

"The global inequity of consumption and pollution is high and increasing. For example, the United States, with 4 percent of the world's population, accounts for 22 percent of world energy consumption. Its per capita consumption is 14 times greater, and CO2 emissions rate 18 times greater, than the low-income countries with 41 percent of the world's population. The richest 10 percent of Americans (25 million people) have an income greater than the poorest 43 percent of the world's people (2 billion)."
........Vic Cox, "U.S. Consumption deserves Reappraisal"

"Measured by population, Chinese outnumber Americans nearly five to one. Yet the United States dwarfs China’s total environmental impact because Americans consume fifty-three times as many goods and services per capita."
(Hertsgaard, 1999)

U.S. Population Clock (in-class)
Comparative Population Growth 2000-2050
(in-class)
Comparative Global Consumption of Natural Resources (in-class)
Global Population Forecast Falls

The Fortune 500 and Natural Capitalism

Imagine you are managers for Fortune 500 global companies. Would you be convinced enough by Hawken's argument in The Ecology of Commerce or in his essay, "Natural Capitalism" to take these ideas to corporate executives and try to convince them that your company could profit by following some of Hawken's suggestions? Many students argued that Fortune 500 managers would not be convinced enough by Hawken's arguments to risk taking them to their bosses. Students argued that:

1. Hawken's strategies are not laid out well enough so that individual managers could apply them to their specific businesses.

2. Fortune 500 companies would not want to take the economic risks involved in making these changes; they could be too costly and might make them less globally competitive.

3. Even if Hawken's proposals were better spelled out for specific businesses, Fortune 500 companies would be reluctant to make these changes fearing the negative results of these changes--caused in part by chaos--on their bottomline and their competitiveness.

4. Fortune 500 companies are already so profitable that they don't need to take these risks in order to be successful; they can continue doing what they are doing and remain profitable and competitive.

5. Fortune 500 companies would be reluctant to make these changes unless they were sure national governments like the United States would provide them economic incentives and tax relief for doing so; they wouldn't want to take these risks without a national government backing them up.

6. Even if national governments provided economic incentives, the Fortune 500 would not be willing to take these risks fearing that their foreign competitors, who aren't burdened by these new green initiatives, would have a competitive advantage over them.

7. Fortune 500 companies might be willing to take these risks if the majority of industrial nations, the United Nations, and the global business communities jointly agreed to support these green initiatives.

The class as a whole agreed that it would be unlikely for Fortune 500 companies to adopt many of Hawken's strategies for creating a sustainable business and a restorative economy. It would be very difficult for the global community of nations to agree on these changes and initiatives, and without this consensus global companies would be unwilling to take the risks involved in shifting towards sustainability. So where does that leave us? Are we doomed to continue business as usual and undermine and destroy of the ability of the Earth to support our advanced industrial civilization?

There is one other alternative. And this is the one Hawken is implicitly arguing for. If global corporations won't make these changes, small, start-up companies looking for a competitive advantage, a way to get into the market and compete with these giant global companies, will adopt these sustainable business initiatives. Hawken's argument is that by reducing their energy costs, their material resources costs, their production and waste costs, and their packaging costs, small aggressive companies can achieve competitive advantages over their larger global competitors and gain a share of the market. Let's look at a specific product that small start-up companies might make that might allow them to challenge the larger, more established global firms. Let's look at energy-efficient automobiles.

The Growth of Hybrid Cars

Amory Lovins and others at the Rocky Mountain Institute have designed and built prototype models of what they call a hybrid or hypercar. (See the RMI: The Synergy Ultralight Hybrid Vehicle: A Conceptual Hypercar site.) Many students commented that this prototype hypercar that can get between 200 and 300 miles per gallon looks like a Toyota Corolla. So it does meet some of the fashion and style requirements of modern consumers. But why should small, start-up companies begin to mass produce these hypercars? Could they compete with General Motors, Ford, Honda, or Toyota? In order to convince small companies and investors to invest in and build this new car, Amory Lovins and others would have to answer a series of tough questions about why this car would be competitive with the cars already on the market. Lovins attempts to do this on his RMI internet site. ( See A Short History of the Hypercar site.)Also see
Designing the Hypercar today. One of the first question Lovins would have to answer is would the car be cheap enough to compete with other small cars currently on the market. ( See RMI's latest report, "Hypercars, Hydrogen, and the Automotive Transition")

But even if initially the cost of buying a hypercar is more than a comparable car made by the big global car companies, the manufacturer of the hypercar could still sell them. The company would argue that even though the hypercar is more expensive, the money saved in terms of fuel costs would very quickly make the hypercar a better buy than a traditional gas-guzzling car. In addition, the company could argue that the hypercar would reduce energy consumption, reduce pollution, and protect the environment. Consumers should buy the car, then, because it saves them money on gas and it protects the environment. But would consumers buy the car?

Many students said the car was too small, too lightweight, not powerful enough, and not safe enough. Americans prefer heavy, strong, powerful cars, even though they consume a lot of gas. But these are the precise questions and challenges that small, start-up car companies would have to address in designing, making, and selling their cars. However, many small companies could afford to sell their hypercar to a small, niche market and still make a profit. They would hope that so many Americans who saw the car and heard about its energy-efficiency would then become interested in buying their car. This is a strategy that many small, start-up companies use to enter into markets already dominated by giant global companies.
(See Hybrid Cars.com )

Many students then said that if the small, start-up company got too successful the global corporations would try to buy it up and takeover its operations. This happened in the 1970s and 1980s when General Motors, Ford, and Chrysler bought shares of Honda, Toyota, Mazda, and Mitsubishi, among others. Now many of these global auto companies are interlinked and share technologies and resources with each other. But even if one of the big global car companies bought the hypercar company out and began making hypercars that would mean tremendous profits for the small company and its investors, and the global marketing of hypercars, which was the goal of the small company in the first place.

Hawken, himself, is an entrepreneur, a veteran of several small, start-up companies. He believes that increasing global competition, and the competitive advantage that sustainable businesses will have, will allow an increasing number of small companies to begin to compete with the dominant global companies. This will force the Fortune 500 companies to begin to look seriously at Hawken's and Lovin's strategies for creating profitable, competitive sustainable businesses.

The Global Futures Project

In fact, there is a corporation called "Global Futures" that consults with small- and medium-sized companies to help them become more competitive and profitable by reducing their energy, material, production, labor, packaging, and waste disposal costs. See Global Futures: Future 500 -- Maximizing returns to Stakeholders at the World's leading Companies .

The Future 500 is a new network of innovative leaders from business, technology, science, and the environment, devoted to achieving a Factor Four improvement in productivity. Factor Four means a fourfold improvement in the amount of value we derive from every unit of every productive resource we use: energy, materials, purchases, labor, and capital. Today's economic and environmental challenges make such a goal necessary, and today's emerging technologies bring it close within our reach.

(See Global Futures: The Futures 500 Program site.) Global Futures consults with businesses throughout the world. In addition to Global Futures, there are a number of consulting companies that help businesses explore the competitive advantages of sustainability. The Natural Step is another such consulting company. Natural Logic is an American consulting company that teaches Natural Logics: Using an Ecological Lens . The larger point is that many businesses are beginning to accept the challenge of creating sustainable businesses, believing that sustainability will provide them a competitive advantage. Here is where Hawken's optimism comes from. He concludes that we should "be hopeful because the solution is profitable, creative, and eminently possible."

Finally, some students said that given the nature of global competition between corporate giants, Hawken's optimism isn't warranted. However, there are real examples of small, start-up companies actually entering markets and very quickly challenging the global giants. One of the best examples of this is Apple computer, who nobody thought could enter the computer market against the industry giant IBM. But by the early 1980s, not only had Apple successfully entered the personal computer market it was leading its competition in building and designing personal computers. Apple forced IBM to enter the personal computer market on the terms set by Apple's highly successful Apple IIs and later the Macintosh. Finally, Netscape entered the personal computer software market in 1995 and very quickly was outselling and dominating the internet browser market. Netscape had not only outcompeted and outsold Microsoft, the industry giant, but forced Microsoft to spend millions of dollars catching up. These are just two examples of small start-up businesses using good design and products to compete and outsell the Fortune 500 corporations.

I think that increasingly Fortune 500 corporations will be forced to begin creating sustainable businesses as government regulations, environmental pollution, and market competition makes doing so in their competitive advantage. Hawken believes that governments and societies can synergistically work with business to encourage and speed-up their commitment to sustainability. But in order to finally convince businesses, governments, and society to make these changes that will create sustainable businesses and restorative economies, we need to first better educate people throughout the world on the need to protect, conserve, and restore the environment. We have the technology, the economic strategies, and the market reforms necessary to preserve and restore the environment, now we need to educate enough people to make these changes a reality. The problem of environmental education and ecological literacy is the next issue we will explore in this class.

RMI: What is Natural Capitalism?

Natural Capitalism is a new business model that synergizes four major elements:

1. Radically increase the productivity of resource use. Through fundamental changes in production design and technology, leading organizations are making natural resources stretch 5, 10, even 100 times further than before. The resulting savings in operational costs, capital, and time quickly pay for themselves, and in many cases initial capital investments actually decrease.

2. Shift to biologically inspired production (Biomimicry) with closed loops, no waste, and no toxicity. Natural Capitalism seeks not merely to reduce waste but also to eliminate the concept altogether. Closed-loop production systems, modeled on nature's designs, return every output harmlessly to the ecosystem or create valuable inputs for other manufacturing processes. Industrial processes that emulate nature's benign chemistry reduce dependence on nonrenewable inputs, eliminate waste and toxicity, and often allow more efficient production.

3. Shift the business model away from the making and selling of "things" to providing the service that the "thing" delivers. Develop an Intelligent Product System: 1. Consumables, 2. Products of Service, and 3) Unsaleables.The business model of traditional manufacturing rests on the sporadic sale of goods. The Natural Capitalism model delivers value as a continuous flow of services, leasing an illumination service, for example, rather than selling light bulbs. This shift rewards both provider and consumer for delivering the desired service in ever cheaper, more efficient, and more durable ways. It also reduces inventory and revenue fluctuations and other risks.

4. Reinvest in natural and human capital. Any good capitalist reinvests in productive capital. Businesses are finding an exciting range of new cost-effective ways to restore and expand the natural capital directly required for operations and indirectly required to sustain the supply system and customer base.

Innovative organizations are already prospering from these four principles. Their leaders and employees are also feeling better about what they do: eliminating unproductive tons, gallons, and kilowatt-hours makes it possible to invest in human capital, the people who foster the innovation that drives future success.

"Natural Capital" refers to the natural resources and ecosystem services: air and water purification, climatic stabilization, waste detoxification, and so on that make possible all economic activity, and indeed all life. Ecosystem services are of immense economic value; some are literally priceless, since they have no known substitutes. Case in point: in 1991-92, the $200-million Biosphere II project in Arizona was unable to sustain breathable air for eight people. Biosphere II Earth performs this task daily at no charge for six billion people.

"Human Capital" refers to the monetized "human resources" of educated minds and skilled hands and the far more valuable but unmonetized "social system services: culture, wisdom, honor, love, and a whole range of values, attributes, and behaviors that define our humanity and make our lives worth living. Just as unsound ways of extracting wood fiber can destroy the ecological integrity of a forest until it can no longer regulate watersheds, atmosphere, climate, nutrient flows, and habitats, unsound methods of exploiting human resources can destroy the social integrity of a culture so it can no longer support the happiness and development of its members. An overworked but undervalued workforce, outsourced parenting, the unremitting insecurity that threatens even the most valued knowledge workers with fear of layoffs, these all corrode community and undermine civil society. The health of societies depends not only on choosing the right means to satisfy human needs but also on understanding the interlinked pattern of those means.

Hawken, "The Next Industrial Revolution,"

Besides climate, the changes in the biosphere are widespread. In the past half century, the world has a lost a fourth of its topsoil and a third of its forest cover. At present rates of destruction, we will lose 70 percent of the world's coral reefs, in our lifetime, host to 25 percent of marine life .3 In the past three decades, one-third of the planet's resources, its "natural wealth;' has been consumed. We are losing freshwater ecosystems at the rate of 6 percent a year, marine ecosystems by 4 percent a year. There is no longer any serious scientific dispute that the decline in every living system in the world is reaching such levels that an increasing number of them are starting to lose, often at a pace accelerated by the interactions of their decline, their assured ability to sustain the continuity of the life process. (Hawken, 4)

Human beings already use over half the world's accessible surface freshwater, have transformed one-third to one-half of its land surface, fix more nitrogen than do all natural systems on land, and appropriate more than two-fifths of the planet's biological productivity. The d oubling of these burdens with rising populations will displace many of the millions of other species, undermining the very web of life. (Hawken, 8)

Fundamental Assumptions of Natural Capitalism

Natural capitalism and the possibility of a new industrial system are based on a very different mind-set and set of values than conventional capitalism. Its fundamental assumptions include the following:

1. The environment is not a minor factor of production but rather is "an envelope containing, provisioning, and sustaining the entire economy."l0

2. The limiting factor to future economic development Is the availability and functionality of natural capital , in particular, life-supporting services that have no substitutes and currently have no market value .

3. Misconceived or badly designed business systems, population growth, and wasteful patterns of consumption are the primary causes of the loss of natural capital , and all three must be addressed to achieve a sustainable economy.

4. Future economic progress can best take place in democratic, market-based systems of production and distribution in which all forms of capital are fully
valued , including human, manufactured, financial, and natural capital.

5. One of the keys to the most beneficial employment of people, money, and the environment is radical increases in resource productivity .

6. Human welfare Is best served by improving the quality and flow of desired services delivered , rather than by merely Increasing the total dollar flow.

7. Economic and environmental sustainability depends on redressing global Inequities of income and material well-being .

8. The best long-term environment for commerce is provided by true democratic systems of governance that are based on the needs of people rather than business . (Hawken, 8-9)

Hawken, "Human Capitalism"

Previous chapters have described how the worthier employment of natural resources can protect and enhance ecosystem services. Are there also worthier ways to employ people, so as to protect and enhance social-system services? Is there a social version of the principles of natural capitalism: of resource productivity, mimicking natural processes, the service and flow economy, and reinvestment in natural capital? Are there ways to restructure economic activity that reward social enrichment and that re-invest in social systems' capacity to evolve ever more diverse and creative cultures?' Can reversing the waste of resources and of money also reinforce efforts to stop wasting people? (Hawken, 287)

Though starting with the dismal economic profile typical of its region, in nearly three decades the city has achieved measurably better levels of education, health, human welfare, public safety, democratic participation, political integrity, environmental protection, and community spirit than its neighbors, and some would say than most cities in the United States. It has done so not by instituting a few economic megaprojects but by implementing hundreds of multipurpose, cheap, fast, simple, homegrown, people-centered initiatives harnessing market mechanisms, common sense, and local skills. It has flourished by treating all its citizens - most of all its children - not as its burden but as its most precious resource creators of its future. It has succeeded not by central planning but by combining farsighted and pragmatic leadership with an integrated design process, strong public and business participation, and a widely shared public vision that transcends partisanship. The lessons of Curitiba's transfor mation hold promise and hope for all cities and all peoples throughout the world. (Hawken, 288)

Teasing apart the strands of the intricate web of Curitiban innovation reveals the basic principles of natural capitalism at work in a particu larly inspiring way. Resources are used frugally. New technologies are adopted. Broken loops are re-closed. Toxicity is designed out, health in. Design works with nature, not against it. The scale of solutions matches the scale of problems. A continuous flow of value and service rewards everyone involved in ever-improving efficiency . As education rejoins nature and culture to daily life and work, myriad forms of action, learning, and attitude reinforce the healing of the natural world - and with it, the society and its politics. For Curitiba has discovered a way to transcend natural capitalism, supplementing its principles and practices with others that start to achieve what we may call human capitalism. (Hawken, 307)

But how, finally, is the city working? In early-1990s surveys, over 99 percent of Curitibans said they wouldn't want to live anywhere else.... Among Curitiba's noteworthy achievements," benchmarked annually to spur further gains, are 95 percent literacy, 96 percent basic vaccination, 99 p ercent of households with drinking water and electricity, 98 percent with trash collection, 83 percent with at least a high-school education, three-fourths of households owner-occupied, one-third the national average poverty rate, and 72-year life expectancy. Curitibans enjoy 86 percent weekly newspaper circulation, 25 radio stations, 14 cable and TV stations, three orchestras (even a famous harmonica orchestra), 20 theaters, 30 public libraries, 74 museums and cultural buildings. The Culture Foundation's monthly program of events, generally with free or very cheap admission, exceeds 40 pages. With a 1996 per-capita GDP of only $7,827 - 27 percent of America's - Curitibans have created what the well-traveled Bill McKibben calls "one of the world's great cities." (Hawken, 307)

Curitiba's central political principle since 1971 has been consistent and profound: to respect the citizen/owner of all public assets and services, both because all people deserve respect and because, as Lerner insists, "If people feel respected, they will assume responsibility to help solve other problems." Closing the broken loop of politics, this principle recycles the poor and hungry, the apathetic and illiterate, into actively contributing citizens. (Hawken, 308)

In Curitiba, its results show how to combine a healthy ecosphere, a vibrant and just economy, and a society that nurtures humanity. Whatever exists is possible;22 Curitiba exists; therefore it is possible. The existence of Curitiba holds out the promise that it will be first of a string of cities that redefine the nature of urban life. (Hawken, 309)

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