Natural capitalism makes economic sense

OECD Observer

OECD Forum, 14th May, 2001: Keynote speech by Amory Lovins, CEO, Rocky Mountain Institute; moderator: John West 

Capitalism in the 21st century should take account of people and nature as well as the more traditional elements of money and goods, Rocky Mountain Institute’s Amory Lovins said on Monday, May 14.

In a talk delivered at the OECD’s Forum 2001 Mr. Lovins asked “Is there a way we can do business as if nature were valuable?”. The answer is “we had better” if we are to reverse a situation where gathering food from fishing is hampered by “shortages not of nets and of boats, but of fish … Not of chainsaws, but of forests.”

In the first industrial revolution, the problem of lack of people to produce goods was resolved by using technical innovation to make people 100 times more productive, he said. “In the next industrial revolution, already under way, we have abundant people and scarce nature … Now it is not people but nature that we need to be using much more productively.”

It is not true that environmentally-neutral solutions are more costly than traditional methods, Mr. Lovins said. He cited successful banana growing in mountains where temperatures fell to –44°C by using an unheated but well-insulated building and the fact that similar insulation for a house would cut the electricity use by 90% and pay for itself in 10 months. For a large building, insulated techniques and no air conditioning would mean 80-90% less energy use, it would take six months less to build and would cost up to 5% less than an air conditioned building, Mr. Lovins said.

He also cited the Hypercar project, a hydrogen-fuelled car whose basic design Mr. Lovins put into the public domain eight years ago and which could go into production as early as 2005. The car uses a carbon fibre body which is strong but far lighter than traditional metal structures, and its only waste product would be hot water, Mr. Lovins said. If the vehicle were to take off, it could displace traditional cars in 20 years, he added.

Companies should think in terms of “unsaleable production” rather than “waste and emissions” because “that makes us ask why are we producing this thing if we cannot sell it; let’s design it out.”

“International organisations such as the OECD have a responsibility to tackle disruptive commercial flows” and help ensure commitments on environmental and social responsibility which have as much force as other international treaties in areas such as trade, Mr. Lovins said.

©OECD Observer May 2001

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