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Question for Discussion: According to Hawken,
how can we balance the needs of business with
the needs of the global environment

Readings: Hawken, pp. xi-17; Hawken, "Natural Capitalism";
"Hawken's Vison"

Video: Green Resources: Hawken Interview

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Hawken and the Restorative Economy

Hawken's Writings on Natural Capitalism

Daly and Ecological Economics

The Rocky Mountain Institute

The Hannover Principles

The Natural Step and Factor Four

Creating a Restorative Economy

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What is a Restorative Economy?


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Hawken's Vision

Hawken: "I see enormous possibility and need for business, for commerce, for entrepreneurs. Entrepreneurs are people who catch a glimpse of how the world can and will change, and then start to conduct their lives in order to create the products or services that will intersect with that change.
We have the means and wherewithal to address and solve these problems within the social and economic frameworks that already exist. I take heart from the fall of the Berlin Wall and the fall of the Soviet Union, in the sense that both were widely unpredicted. I do believe there are times in society when there is a sudden change that isn't convulsive or violent. "

Hawken : "If there's any time, it's right now and over the next 20 years when we need people to step up to the plate and actually change the world. Of course, everybody thinks that about their historical era.
But the fact is that we as a civilization have to radically reduce the throughput of materials and energy -- we're talking about an 80% to 90% reduction -- while improving the quality of life for all people. That's a pretty interesting agenda! That catapults you into a whole other category of design and creativity and imagination. And that is happening already."

"Do you think there's time to make the changes you advocate before it's too late? "

Hawken: "Well, it's a very valid question; I get it all the time. But it's not a helpful question. What if I said no? What would you do? The fact is nobody knows how much time there is. So, therefore, what are you going to do? That's the question. What are you going to do? For me, we have just enough time to do what we need to do well. And we always do. Always."

Hawken: Natural Capitalism

"We can create new jobs, restore our environment, and promote social stability. The solutions are creative, practical, and profitable."

"The lesson of Biosphere II is that there are no man-made substitutes for essential natural services. We have not come up with an economical way to manufacture watersheds, gene pools, topsoil, wetlands, river systems, pollinators, or fisheries. Technological fixes can't solve problems with soil fertility or guarantee clean air, biological diversity, pure water, and climatic stability; nor can they increase the capacity of the environment to absorb 25 billion tons of waste created annually in America alone. "

"Economist Herman E. Daly cautions that we are facing a historic juncture in which, for the first time, the limits to increased prosperity are not the lack of man-made capital but the lack of natural capital. The limits to increased fish harvests are not boats, but productive fisheries; the limits to irrigation are not pumps or electricity, but viable aquifers; the limits to pulp and lumber production are not sawmills, but plentiful forests."

"In fact, reducing resource use creates jobs and lessens the impact we have on the environment. We can grow, use fewer resources, lower taxes, increase per capita spending on the needy, end federal deficits, reduce the size of government, and begin to restore damaged environments, both natural and social."

"Reducing income taxes while increasing resource prices will stimulate employment and environmental restoration. How can government help speed these entrepreneurial "salmon" along? The most fundamental policy implication is simple to envision, but difficult to execute: We have to revise the tax system to stop subsidizing behaviors we don't want (resource depletion and pollution) and to stop taxing behaviors we do want (income and work). We need to transform, incrementally but firmly, the sticks and carrots that guide business."

"To create a policy that supports resource productivity will require a shift away from taxing the social "good" of labor, toward taxing the social "bads" of resource exploitation, pollution, fossil fuels, and waste. This tax shift should be "revenue neutral" -- meaning that for every dollar of taxation added to resources or waste, one dollar would be removed from labor taxes. As the cost of waste and resources increases, business would save money by hiring less-expensive labor to save more-expensive resources. The eventual goal would be to achieve zero taxation on labor and income."

"Our living systems and social stability are at risk. But the solutions are profitable, creative, and eminently possible. In 1750, few could imagine the outcome of industrialization. Today, the prospect of a resource productivity revolution in the next century is equally hard to fathom. But this is what it promises: an economy that uses progressively less material and energy each year and where the quality of consumer services continues to improve; an economy where environmental deterioration stops and gets reversed as we invest in increasing our natural capital; and, finally, a society where we have more useful and worthy work available than people to do it. "

"A utopian vision? No. The human condition will remain. We will still be improvident and wise, foolish and just. No economic system is a panacea, nor can any create a better person. But as the 20th century has painfully taught us, a bad system can certainly destroy good people."

"Natural capitalism is not about making sudden changes, uprooting institutions, or fomenting upheaval for a new social order. (In fact, these consequences are more likely if we don't address fundamental problems.) Natural capitalism is about making small, critical choices that can tip economic and social factors in positive ways....... "

Despite the shrill divisiveness of media and politics, Americans remain remarkably consistent in what kind of country they envision for their children and grandchildren. The benefits of resource productivity align almost perfectly with what American voters say they want: better schools, a better environment, safer communities, more economic security, stronger families and family support, freer markets, less regulation, fewer taxes, smaller government, and more local control.

The future belongs to those who understand that doing more with less is compassionate, prosperous, and enduring, and thus more intelligent, even competitive."

In a recent article by columnist Ben Wattenberg, "Global Growth Points to Dawning of a Golden Age," it is announced that the International Monetary Fund (IMF) had determined that the Global Economic Growth has been growing at four percent a year for the last four years. The IMF predicts even higher growth rates will continue on into the new millennium. Wattenberg and other economic pundits are so excited by this news that they have declared the dawning of a "Golden Age." For Wattenberg and others, this news of higher global economic growth represents great news. Economic growth should create more wealth, opportunities, and abundance for all. But does this global growth really mean the coming of a new Golden Age? Or does it mean the increasing destruction of the global environment in the search for more resources to exploit and create even higher profits?

In The Ecology of Commerce: A Declaration of Sustainability, Paul Hawken argues that increased global economic growth, created by our current global industrial economy, will only further destroy the environment and threaten our society and the human future. Unlike Wattenberg, Hawken would ask how this increased global economic growth was created. If it was created by destroying more non-renewable resources, destroying ecosystems, and polluting the environment, then this growth is counter-productive, and may even indicate the continuing decline of our global industrial society. Below is a report on the destruction of American farmland as a result of urban and industrial sprawl. This is a good example of how economic growth often destroys the environment and resources that our society depends on for future growth.

U.S. losing 50 acres of farmland an hour,group says

The United States loses nearly 50 acres of prime farmland an hour to urban development, a conservation group said Thursday.

"The nation's best and most productive farmland is being needlessly destroyed," said Ralph Grossi, president of the American Farmland Trust. "High quality farmland deserves to be treated as more than just a holding pattern for future development.

"The nation needs to take a more strategic approach to farmland protection by giving communities, states and regions the ability to identify the various agricultural, environmental and economic benefits provided by farmland ... providing them ways to permanently protect the resource."

According to the group, 4.3 million acres of prime and unique farmland were lost to development during the decade ending in 1992, or nearly 50 acres an hour.

Texas lost the most, 489,000 acres, followed by North Carolina with 295,000 acres, Ohio with 281,000 acres, Georgia with 183,000 acres and Louisiana with 177,000 acres. In all, 17 states lost more than 100,000 acres each.

A report issued by the group, "Farming on the Edge," said 70 percent of U.S. fruit, 69 percent of vegetables and 52 percent of dairy goods were produced on land threatened by urban development.

The ten most threatened areas, it said, were:

1. Sacramento and San Joaquin valleys in central California.

2. Northern piedmont in Maryland, New Jersey, Pennsylvania and Virginia.

3.Southern Wisconsin and Northern Illinois "drift plain."

4. Texas blackland prairie in eastern Texas.

5. Willamette and Puget Sound valleys in Oregon and Washington state.

6. Florida Everglades and associated areas.

7.Eastern Ohio till plain.

8.Lower Rio Grande valley in southern Texas.

9.Mid-Atlantic coastal plain in Delaware and Maryland.

10. Southern part of the New England and Eastern New York uplands in Connecticut, Massachusetts, New Hampshire, New Jersey, New York and
Rhode Island.

Hawken's Vision of a Restorative Economy

Hawken argues that "sustainable development" is not enough. "Any viable economic program must turn back the resource clock and devote itself actively to restoring damaged and deteriorating systems -- restoration is far more compelling that the algebra of sustainability.
(Hawken, xv)

Hawken argues that to the extent that our current industrial economy profits by destroying the environment and destroying and wasting scarce resources is the extent to which it is not sustainable and even self-destructive. The larger question of his book is this: How can we design and create a restorative economy, an economy in which businesses profit by preserving and restoring the environment and scarce resources? Instead of global corporations competing to destroy resources and exploit environments, corporations should compete to "increase and preserve resources." Hawken lays out 8 larger objectives or design principles for creating this restorative economy

1). Reduce absolute consumption of energy and natural resources in the North by 80 percent within the next century.2). Provide secure, stable, and meaningful employment for people everywhere.3). Be self-actuating as opposed to regulated or morally mandated.4). Honor market principles.5). Be more rewarding than our present way of life.6). Exceed sustainability by restoring degraded habitats and ecosystems to their fullest biological capacity.7). Rely on current income.8). Be fun and engaging, and strive for an aesthetic outcome.Throughout his book, he challenges the reader to "imagine yourself a designer, remaking a world where commerce and environmental restoration are synonymous.In order to create this restorative economy, we must rethink the goals and processes by which our societies and economies use the environment. But Hawken is not a utopian. He believes that with the right incentives, corporations, governments, and consumers can be encouraged to profit by and increase their standard of living while at the same time restoring the environment. The larger challenge he now must address is how can we use the free market system, business competition, the laws of supply and demand, and the search for profits to preserve, protect, and restore the environment. If our present industrial economy profits by destroying resources and environments, how do we transform this economy into a restorative economy?In the Paul Hawken interview, he argued that our present economy and society is in a slow, gradual process of transforming itself from an industrial to a restorative economy. He believes that just as our industrial economy grew by exploiting cheap, abundant natural resources, a restorative economy will profit by conserving resources and restoring environments by exploiting cheap, abundant human labor. For Hawken, the economic challenge is how to transform our current dependence on cheap natural resources into a dependence on cheap human labor. He argues that we can greatly reduce our consumption and use of natural resources using current and future technology and lots of human labor. Hawken is now writing a book with Amory Lovins describing the "next industrial revolution" which will focus on using much fewer natural resources to support and maintain our high living standards. Hawken and Lovins believe that we currently have the technology to reduce our consumption and use of 90 percent of the natural resources we now use while at the same time maintaining our current standard of living.
(See Natural Capitalism: Creating the Next Industrial Revolution (1999)
Hawken argues that governments can't solve the environmental crisis, neither can environmentalists. The only institution powerful enough to solve the environmental crisis is business. If we can't convince businesses that it is in their short- and long-term best interest to protect and conserve natural resources and restore environments, then the global environmental crisis will destroy our global industrial society. Far from seeing business as the major obstacle to ending the environmental crisis, Hawken sees business as the only hope.But why is Hawken appear to be so optimistic? Doesn't he understand that global corporations are consuming the world's scarce natural resources and exploiting the global environment in the name of continued economic growth? Doesn't he understand that our global industrial economy is destroying the future in the name of present profits? Why doesn't he simply admit that our global industrial civilization is suicidal and self-destructive?If we refuse to accept Hawken's challenge that business and our global economic institutions can be redesigned to create a restorative economy, then we must accept the eventual collapse and destruction of our modern industrial civilization. Clearly, Hawken believes we have no other choice but to recognize and accept the challenge of transforming and redesigning our economic systems. He understands that this process will take time and will occur in gradual, step-by-step increments. If they are to be successful, these reforms will have to be incremental and popularly supported. The challenge of creating a restorative economy is, therefore, even harder and more formidable. At each step of the reform and the design process, supporters must convince businesses, governments, workers, and citizens that these changes will benefit them and will improve their lives and standards of living.

Hawken believes the reform process has already begun, because many businesses, governments, workers and consumers are even now beginning to change the way they use, consume, and waste natural resources and products. Recycling, protection of old-growth forests, restoring depleted fisheries, reducing dependence on farm chemicals, encouraging mass transit and ride-sharing, and protecting and restoring local rivers and streams. How do we speed up this process of reform and create a series of escalating and self-reinforcing business, society, and environmental successes that will move this process along even further? Hawken may not have all the right answers, but his book begins the process of asking the right questions and posing the tough challenges.

Hawken doesn't sufficiently examine how we can go from our present economic and political system based on profits, lowest costs, environmental destruction, dependence on non-renewable resources, and pollution to one based on sustainability, restoring the environment, preserving scarce resources, and protecting quality of life. He provides a nice set of examples of how we could use green taxes and green fees to create new economic incentives to businesses to protect and restore the environment. But how do we get from where we are to where we want to go? If we can answer this question, we can begin to create a restorative economy and solve the global environmental crisis. But this is a very difficult question to answer. People like Paul Hawken and Amory Lovins are examples of environmental and energy consultants who get paid by cities and businesses throughout the world to help them answer questions like this.

Let's look at what Amory Lovins of the Rocky Mountain Institute would tell a city that came to him for his advice on what they should begin to do to create a sustainable city and protect and restore its environment .( See The Rocky Mountain Institute's Economic Renewal Site):

Hawken, A Teasing Irony

"The ultimate purpose of business is not, or should not be, simply to make money. Nor is it merely a system of making and selling things. The promise of business is to increase the general well-being of humankind through service, a creative invention and ethical philosophy. Making money is, on its own terms, totally meaningless, an insufficient pursuit for the complex and decaying world we live in."(1)

"We have the capacity and ability to create a remarkably different economy, one that can restore ecosystems and protect the environment while bringing forth innovation, prosperity ; meaningful work, and true security. As long as we continue to ignore the evolutionary thrust and potential of the existing economy, the world of commerce will continue to be in a state of disorder and constant restructuring. This is not because the worldwide recession has been so deep and long, but because there is a widening gap between the rapid rate at which society and the natural world are decaying and the agonizingly slow rate at which business is effecting any truly fundamental change." (2)

"We don't usually think of ecology and commerce as compatible subjects. While much of our current environmental policy seeks a "balance " between the needs of business and the needs of the environment, common sense says t
here is only one critical balance and one set of needs: the dynamic, ever-changing interplay of the forces of life. The restorative economy envisioned and described in this book respects this fact. It unites ecology and commerce into one sustainable act of production and distribution that mimics and enhances natural processes." (3)

"Quite simply, our business practices are destroying life on earth
. Given current corporate practices, not one wildlife reserve, wilderness, or indigenous culture will survive the global market economy. We know that every natural system on the planet is disintegrating. The land, water, air, and sea have been func­tionally transformed from life-supporting systems into repositories for waste. There is no polite way to say that business is destroying the world." (3)

"How can business itself survive a continued pattern of worldwide degradation in living systems? What is the logic of extracting diminishing resources in order to create capital to finance more consumption and demand on those same diminishing resources?
How do we imagine our future when our commercial systems conflict with everything nature teaches us?" (5)

"We should not be surprised, then, that there is a deep-seated unwillingness to face the necessary reconstruction of our commercial institutions so that they function on behalf of our lives.
Business believes that if it does not continue to grow and instead cuts back and retreats, it will destroy itself. Ecologists believe that if business continues its unabated expansion it will destroy the world around it. This book will discuss a third way, a path that restores the natural communities on earth but uses many of the historically effective organizational and market techniques of free enterprise." (9)

"Free-market purists believe that their system works so perfectly that even without an overarching vision the marketplace will attain the best social and environmental outcome. The restorative economy is organized in a profoundly different way.
It does not depend upon a transformed human nature, but it does require that people accept that business is an ethical act and attempt to extend to commerce the interwoven, complex, and efficient models of natural systems. Current commercial practices are guided by the promise that we can stay the way we are, live the way we have, think the thoughts of old, and do business unburdened by real connections to cycles, climate, earth, or 'nature. Restorative economics challenges each of these assumptions." (11)

"Business has three basic issues to face: what it takes, what it makes, and what it wastes, and the three are intimately connected. First, business takes too much from the environment and does so in a harmful way; second, the products it makes require excessive amounts of energy, toxins, and pollutants; and finally, the method of manufacture and the very products themselves produce extraordinary waste and cause harm to present and future generations of all species including humans." (12)

"The restorative economy conies down to this: We need to imagine a prosperous commercial culture that is so intelligently designed and constructed that it mimics nature at every step, a symbiosis of company and customer and ecology.
This book, then, is ultimately about redesigning our commercial systems so that they work for owners, employees, customers, and life on earth without requiring a complete transformation of humankind." (15)

"Many believe that it is too late; that at this moment in our history we cannot be redeemed through existing institutions. It is true that in our lifetime we cannot restore felled ancient forests, vanished wetlands, ghostly strip mines, or the ruined lives of toxic waste victims. Contemporary events support Goldsmith's longstanding declaration, "Honor sinks where commerce long prevails. "
It takes a serious leap of faith to imagine a transformed Fortune 500, a restorative sustainable economy that will offer full employment, more security, better education, less fear, more stability, and a higher quality of life. But I believe this will happen because prior forms of economic behavior no longer produce the desired results." (16-17)

"Ironically, business contains our blessing. It must, because no other institution in the modern world is powerful enough to foster the necessary changes.
Perhaps during the many battles between environmentalists and businesspeople we have been asking the wrong question all these years. As generally . proposed the question is "How do we save the environment?" As ridiculous as it may first sound to both sides, the question may be "How do we save business?" Business is the problem and it must be a part of the solution. Its power is more crucial than ever if we are to organize and efficiently meet the world's needs" (17)

What is sustainable development, and
is it really achievable?

Sustainable development means many things to many people. Indeed, the term has been so widely used that it has lost much of its meaning. Here's a definition from RMI's Economic Renewal Guide. Sustainable development:

1. Weighs community values and the environment alongside conventional business concerns.

2. Uses renewable resources no faster than they can be renewed.

3. Uses non-renewable resources understanding that someday a renewable substitute will be required.

4. Seeks ways to strengthen the economy without increasing "throughput."

5. Focuses more on getting better, less on getting bigger.

6. Seeks development that increases diversity and self-reliance.

7. Puts waste to work.

8. Regards quality of life as an essential asset.

9. Considers the effects of today's decisions on future generations.

10. Considers the off-site effects of decisions.

11. Considers the cumulative effects of a series of decisions.

12. Measures whether actions actually do what they're intended to do.

Each of these concepts is discussed in detail in "Sustainable Development: Prosperity Without Growth," which is posted at this site.

Achieving sustainable development is an incremental process, not an overnight transformation. Any local economy is likely to have some unsustainable aspects and some sustainable ones. A realistic goal is to gradually phase out unsustainable activities and, to the extent possible, phase-in sustainable (or at least more sustainable) ones to take their place. How to do this is the subject of the entire Economic Renewal Guide, but you'll find a number of ideas and examples in the book's second chapter, "RMI's Economic Renewal Program: An Introduction," which is also posted to this site.

RMI offers hands-on training and consultation on sustainable community development. For more information, see the Economic Renewal Program Guide to Services.

What is Economic Renewal?

Economic Renewal is both a philosophy of sustainable development and a step-by-step process for achieving it. Created by RMI, Economic Renewal has been field-tested in dozens of communities around the country.

Communities too often assume that the solution to economic problems is growth-more industry, more commercial or residential development, more tax revenues, etc. In contrast, the underlying philosophy of Economic Renewal is do better with what you already have. Communities that try to grow (in the sense of expand) their way out of problems often find that the growth only brings more--and bigger--problems. By doing better with what they've got, communities can increase wealth while maintaining their quality of life and values, retaining control over their future, and reducing the risk of unintended consequences.

The following is a summary of "RMI's Economic Renewal Program: An Introduction," which is posted in full elsewhere at this site.

Economic Renewal stresses four principles:

Plug the leaks. Like heat from an uninsulated home, dollars leak from an inefficient community. Plugging unnecessary leaks puts money back into the local economy just as surely as if it had been earned through new industry--but it avoids many growth-related problems and costs.

Support existing businesses. Too many communities woo outside businesses while overlooking the wealth-creating power of their own entrepreneurs. Locally owned businesses tend to be more responsive to local needs and values, and more likely to stand by the community through thick and thin. Supporting them also keeps more dollars circulating in the local economy.

Encourage new local enterprise. As with existing businesses, new businesses will contribute far more to the local economy if they're locally owned. A town that's plugging leaks and supporting existing businesses is an exciting place to start a new one.

4. Recruit compatible new businesses. "Smokestack-chasing"--the indiscriminate courting of outside corporations--is a risky, high-stakes game that has left many a small town in the lurch. However, having pursued the previous three steps, a community will be in a stronger position to recruit new businesses that are compatible with its values and needs.

Nine Tools

In more than a decade of field-testing Economic Renewal, RMI staff have worked with dozens of successful, resourceful communities. Based on their inspiring experiences, here are nine tools for harnessing the above principles:

1. Ask why. Asking why shifts the focus from particular proposals, which may divide the community by appealing to entrenched positions, to the underlying goals that unite the community. Having asked why, you can then choose the best way to achieve those goals rather than narrowly focusing on one-size-fits-all solutions.

2. Manage demand. "Demand management" starts by asking what job the user wants done, and then determining the most efficient way to do it. It usually turns out that no kind of new supply can compete with the more efficient use of what you've already got.

3. Pursue development, not necessarily growth. Growth, in the sense of expansion, is an increase in quantity; development is an increase in quality. True, expansion creates jobs; but sustainable development puts people to work, too, without the problems often associated with physical expansion.

4. Seek small solutions. The bigger the solution, the harder it is to pull off, the longer it takes, and the greater the risks. Small solutions are usually faster, more flexible, less expensive, and more manageable than large ones.

5. Find problem-solvers who care. Entrusting your community's future to disinterested outsiders is likely to lead to delay, disappointment, and an unacceptable loss of control over the outcome. In contrast, local people--especially local business people--have a vested interest in seeing your community thrive.

6. Increase the "multiplier effect." When a dollar enters a community and is then spent outside the community, its benefit is felt only once. Keeping dollars re-circulating in the community multiplies their benefit, adding more value, paying more wages, financing more investments, and ultimately creating more jobs.

7. Find hidden local skills and assets. Virtually every community has some unique asset or skill that can be put to work creating wealth. The trick is to examine your community with a fresh eye. Opportunities may be right there for everyone to see but waiting for someone like you to recognize them and put them to work.

8. Build social capital. A community's most important strength is the capacity of its people to work together for the common good. Like more conventional forms of capital, this "social capital" is essential to successful

9. Organize regionally. The human scale of a community--which is its strength on a social level--can make for limited economic options and few opportunities to make business connections. A smart development effort looks for ways to tie in more fully to the regional economy.

The Economic Renewal Process: Think of the principles and tools discussed above as the backdrop for Economic Renewal. The main event is an eight-step process of collaborative decision-making that's designed to bring together residents from all walks of life to develop projects to strengthen their community and its economy.

With the exception of the first preparatory step, the process consists of a series of town meetings, each building on the results of the previous one. The process is conducted by and for community residents, who, after all, understand their community's needs and assets better than any outside "expert."

This process is described in detail in RMI's Economic Renewal Guide, which you can order through our online catalog. Other Economic Renewal books on food and agriculture, energy, and business opportunities can also be found there.

RMI also conducts training seminars and consultations in communities interested in using Economic Renewal to develop sustainably. For more information, see the Economic Renewal Program Guide to Services.

Our town is growing too fast. What can
we do?

A community that's growing too fast will probably experience some or all of the following symptoms:

1. rising cost of living
2. higher taxes
3. traffic congestion and pollution
4. housing shortages
5. increasing crime
6. cut-throat business competition
7. increasing intolerance of differences
8. disrespect for traditional leadership

If you think your town is growing too fast, this list will probably sound familiar.

Before discussing what to do about growth, let's first look at why it so often happens even when it's not in a community's best interests. The following section is excerpted from "Sustainable Development: Prosperity Without Growth," which is posted in full at this site. For a more detailed analysis of community growth and what to do about it, order "Paying for Growth, Prospering from Development."

The Problem of Growth in Boulder, Colorado

Clearly Amory Lovins and the Rocky Mountain Institute team approach creating sustainable cities as a complex, involved process of education, technology and design, and development of institutional reform. I want to give a clear example of how this process of creating a sustainable city can go wrong. Let's use the city of Boulder, Colorado, as a example of the real problems that can beset a city that doesn't properly think through the process of economic reform and renewal.Since the late 1970s, the city of Boulder has had a growth management plan. This plan focuses on limiting the growth of old businesses and restricting the introduction of new businesses; limiting the construction of new housing and remodeling existing housing units; and purchasing "open space" around the city to prevent further business and housing growth. The goal of this plan is to limit the growth of urban sprawl, crowding congestion, and pollution. But does it work?Last year, the city of Boulder estimated that 50,000 people drive to Boulder every day to work. These people are creating a massive traffic, congestion, and pollution problem. Boulder is in a valley and the smog and pollution collects and is trapped on the valley floor. In response to these growing problems, the city of Boulder has become even more committed to limiting new business growth in Boulder. But with Boulder's refusal to allow new manufacturing companies and their high-paying jobs to locate in Boulder, this makes it even more difficult for the people who work in Boulder to be able for afford to live here. As a result, Boulder has seen a growth in low-paying service sector jobs and increased commuting into Boulder, because Boulder will not allow any more industrial businesses to locate in Boulder. All this makes it even more necessary for the people who work in Boulder to drive long distances to work. As the few remaining building sites are developed around the edges of Boulder, the costs of housing keeps going up, because there is a limited new supply of housing. As the cost of housing in Boulder and in Boulder county continues to go up because of our commitment to open space and limiting development, more and more people find that they have to commute even longer distances to work in Boulder. As a result, Boulder feels more crowded, more polluted, more congested, and more populated than it really is. Boulder's growth control measures are not solving the problems created by growth and congestion but in some ways making them worse. It is precisely complex, difficult problems like this that Amory Lovins and Paul Hawken and other environmental and economic consultants get paid thousands and thousands of dollars to try to solve. They are not easy problems. Often the very efforts you take to solve the problem, make it much worse. Given the difficulty and the political conflict that can result from such efforts to control growth and promote sustainable cities, many cities throw up their hands in despair and say it is out of their control. But this simply isn't true as Lovins and Hawken's consulting work demonstrates.But just think, if it is so difficult to create sustainable cities, how can we expect states, nations, and the global community to even begin to take the steps they need to to create sustainable human communities? In addition to the difficulties of design and overcoming divisive political conflicts, states and nations are faced with the increasing economic and political power of national and global corporations who are using their considerable power and influence to block these efforts to create restorative economies and societies. Currently, large corporations control and limit the power of governments to make these reforms by threatening to cut off the vast amount of money they give state and national politicians and political parties. Hawken argues that businesses should stop trying to corrupt the political process and allow government to function as "the guardian" of business and the larger society. Business should allow government to set the standards and limits that will make it profitable for business and citizens to protect and restore the environment. But how can government convince these powerful corporate interests it is in their interest to allow government to reform our economy and society so that the market and free enterprise will encourage everyone to protect and restore the environment? This is a very difficult question to answer.Let's look at a specific federal government effort to change the economic incentives in order to encourage business and consumers to reduce their consumption of fossil fuels. In 1993, President Clinton suggested that the United State put a carbon tax on all businesses and consumers who used fossil fuels. By increasing the costs of oil, gasoline, coal, and natural gas, the federal government would be encouraging business and consumers to reduce their consumption of fossil fuels and develop and purchase new, more energy-efficient technology. But the major energy companies and the automobile companies spent millions of dollars to kill this carbon tax arguing that it would reduce their profits and costs thousands of jobs; they were focused on the short-term costs to business, not the long-term costs to business and society of continuing to use increasing amounts of fossil fuel. As a result of pressure from business and consumers, President Clinton quickly backed off his carbon tax proposal. He discovered that American business and consumers were unwilling to pay "green taxes" in order to protect the environment and their society.The failure of the carbon tax proposal raises an interesting series of questions: What could the government have done to convince American business and consumers that such a tax would benefit them both in the long- and short-term, that conserving energy and reducing pollution are real economic benefits that would make up for the burden of new taxes? Here Hawken begins to develop an answer. He argues that the government should gradually "phase-in" these green and environmental taxes over a period of twenty years. The taxes on energy consumption, use of material resources, pollution, environmental destruction, and consumption of products that aren't durable or recyclable should be slowly and gradually increased to allow business and consumers time to change their behavior and develop and buy new technology. In addition to phasing-in these new taxes, governments should slowly phase-out taxes on income and corporate profits. By convincing business and consumers that these new taxes are revenue-neutral, that is don't involve new, additional taxes but simply shift the tax burden from income and profits to environment and consumption, the government would be much more likely to convince them to accept these new green taxes. In addition, the government could give individuals and businesses tax breaks for buying new technology that would reduce their energy consumption. Finally, the government could give the energy companies tax incentives and financial support to move them from being in the fossil fuel business to being in the energy conservation and renewable energy business. These gradual, incremental changes, and the economic and environmental education about the true costs of our present system, would go a long way toward winning over business and consumer to accepting these new green taxes.The larger immediate problem is that our political system is so corrupt and so overburdened with campaign contributions and financial support to politicians and parties that national and global corporations can use their economic power to prevent even small, initial steps to reform our economic and social institutions to create a restorative economy and society. ( See the Center for Public Integrity site for a number of studies of political and financial corruption in the United States.) It is at this point that many Americans throw up their hands and say: "The system is so corrupt nothing can be done about it." But if we don't accept the challenge of reforming our political, economic, and social institutions we must accept the horrifying conclusion that our global industrial civilization is doomed to destroy itself by undermining the environment that supports it. The larger challenge that Hawken raises in The Ecology of Commerce is how we can collectively reform our institutions, recognizing the immense challenge and difficulty in trying to do so. Instead of giving up, people like Paul Hawken and Amory Lovins see this challenge as an interesting, exciting, and profitable venture for them. Those people who can provide real solutions and reforms that help us gradually move toward a sustainable, restorative economy and society will not only profit in doing do they will be helping to guarantee a future for their children and grandchildren. This is a real challenge, but it is not an impossible one.

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