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Philip Sutton Convener Greenleap Strategic Institute 29 October 2006 Version 1'b

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Title: Philip Sutton Convener Greenleap Strategic Institute 29 October 2006 Version 1'b


1
Philip SuttonConvenerGreenleap Strategic
Institute29 October 2006 (Version 1.b)
  • Creating a
  • Green Growth Strategy
  • Workshop notes

Up-to-date notes can be found at
http//www.green-innovations.asn.au/green-growth/
Green-growth.htm
2
Anchoring Green Growth Strategies on actually
achieving sustainability, very fast
3
The real structure of the economy
4
Conversion of Natures economy to the Human
economy
5
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
6
There is a rapid switch in the ratio of Direct
vs Indirect Costs of developments as natures
economy shrinks and the human economy grows
7
Climate change case study
8
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9
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. 429-436.
10
Flows of emissions of CO2 from burning
fossil-fuels have risen rapidly since 1950
Gt CO2
Source World Resources Institute, CAIT
11
Strong Global Warming Observed
Hadley Centre for Climate Prediction and
Research Based on Folland et al (2000) and Jones
and Moberg (2003)
12
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/ne
ws/releases/2005/drought_research.shtml
13
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14
Global insurance losses1970 2005
Source Swiss Re sigma no1/2005
www.theclimategroup.org/assets/Bruce20Thomas20(0
6-0420pm).ppt
15
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16
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

17
2 ºC warming is thought to be a rough boundary
between dangerous and catastrophic climate
change
18
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.
19
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20
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
21
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22
  • 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

23
Crucial Prevention AspectAvoiding Catastrophic
Climate Change
24
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.

25
We need to treat climate change not as a
long-term threat to our environment but as an
immediate threat to our security andprosperity
It is now becomingincreasingly clear that it is
what we do in the next 15 years that matters
most. John Ashton, the UK's climatechange
envoy, 8 September 2006
26
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.
27
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 300-280 ppm (precautionary principle)

28
End ofclimate change case study
29
A completely new development paradigm needed
  • Green growth must be 100 decoupled from damage
    and it must enable the restoration of natures
    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.

30
Key is to 100 de-link economic growth from
environmental impact / waste
31
Homeostatic management
  • Dynamically creating/maintaining a state of
    sustainability
  • prevention (eg. Natural Step principles)
  • recovery/restoration

32
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
    trade-offs
  • We need to recognise that we are facing a global
    sustainability emergency.

33
Creating a Green Growth Strategy
34
Economic growth relates to the service flow (of
the whole product), not to the physical
platform (which makes it possible for
dematerialisation to work)
35
The conditions under which a truly sustainable
economy could have continuing economic growth
                     
Continually rising service flow - to benefit a
stable population at a sustainable level
                                         
Fixed (or declining) stock of materials
maintained in a closed-cycle (with minuscule top
up from nature)
Stock enhanced while in use
New capital
Reuse recycle
Fixed (or declining) flow of renewable energy
         
36
Old business-as-usual, new business-as-usual and
the sustainability-achieving 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.

37
Fastest industrial restructuring
  • Korea from agricultural nation to world
    competitive manufacturing economy in 20 years
  • US after Pearl Harbor from worlds largest
    consumer economy to worlds largest war economy
    in 1 year

(complete infrastructure change)
(complete change to how infrastructure is used)
38
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.

39
Analyse new economies 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.
40
Simplifying the task of dealing with multiple
issues at the level of industry/economy
restructuring
  • Pick the issues that have the biggest impact that
    cant be ignored or that we cant 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.

41
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42
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

43
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

44
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

45
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46
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.

47
How can service flow be boosted in perpetuity?
  • via improved qualities
  • via more qualities
  • that benefit the user and the environment/communit
    y
  • achieving this depends on compatible sources of
    productivity growth
  • and this depends on continuing innovation to
    overcome diminishing returns

48
Major sources of productivity growth that neednt
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

49
Old Sources of productivity diminished by shift
from physically growing economy
New Sources of productivity boosted by shift to
environmentally sustainable economy
  • Cheap physical resources and abundant supply
    (materials, energy, water, land) (But this source
    of productivity is being constrained anyway)
  • Quick and easy single-purpose decision-making on
    most things (but leads often to poor/low wisdom
    decision-making)
  • 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

50
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)

51
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 gt CO2
    resequestration)

52
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

53
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).

54
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55
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

56
Questions for workshop(following)
57
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
    business-as-usual, (b) the new business-as-usual
    and (c) the new sustainability-achieving elements
    of the economy?

58
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?

59
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
    sustainability-achieving?
  • How should your economy relate to the old
    business-as-usual, new business-as-usual and
    sustainability-achieving elements of current or
    new export markets?

60
Tools to help with the questions(following)
61
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

62
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

63
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 RD and
    innovation programs
  • Make sure that all long-lived investments are
    compatible with an environmentally sustainable
    economy

64
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

65
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 societieshttp//www.green-innova
    tions.asn.au/Race-to-Sustainability.htm

66
The principle of eco-efficiency(dematerialisation
)
  • Aim for Factor x improvements in eco-efficiency
  • Dont lock into arbitrary Factor 4 or Factor 10
    goals
  • Calculate afresh

See Dutch Sustainable Technology
Development book
67
The principle of closed-cycle
  • Power with renewable energy

68
Strategies/initiatives forzero 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

69
A new waste hierarchy for a zero waste society
70
Philip Sutton Green Innovations 19 May
2002 Version 2.e
71
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72
How can we drive the change?
73
Introducing broad-based ecotaxation
74
Introducing broad-based ecotaxation
75
Opportunities for economic growth in a physically
constrained world
Zone of intermediation
The living world(includes humans)
The social world
Benefit
Benefit
Expansion of coverage by service ofthe
population
Improvementof service quality
Carefully manage interface
Carefully manage interface
Impact
Impact
76
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77
Managing for sustainability-promotion through
the business cycle
 

Spread new paradigm

Cost saving, risk management
Cost saving, risk management
customer loyalty measures

customer loyalty measures

Peak 2

Peak 1

Early movers explore  
Early movers

explore

Reach consensus on new paradigm

Sell new paradigm products
Start new investments
Prepare initiatives

Start regulatory taxes
Lock in initiatives
Downswing 2

Downswing 1

Upswing 1



Trough 2

Trough 1

Year X
Year X1
Year X2
Year X3
Year X4
Year X5
Year X7
Year X9
Year X6
Year X8
 
78
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.

79
Making the Green Growth Strategypossible
80
3 stages to make the strategy feasible
Creating a mandate
Developing the mandate
Implementing the mandate
81
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 (??) argued that we need to act
    on universal, not partial love. Compassion for
    all life, human and non-human, is central to
    Jainism, a philosophy of even greater antiquity
    founded in India.

82
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).

83
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.

84
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.

85
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.

86
Questions for workshop(following)
87
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?

88
Thank you
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