<x-charset ISO-8859-1>http://resurgence.gn.apc.org/issues/lovins213.htm


Natural Economy
Design as if nature matters.

Amory Lovins

from Resurgence issue 213
July / August 2002

In the 1950s, the Dayak people of Borneo had malaria. The World 
Health Organization thought they had a solution: spray large amounts 
of DDT over the countryside to kill the mosquitoes. However, the DDT 
also killed a tiny parasitic wasp that had previously controlled 
thatch-eating caterpillars. Without the wasps, the caterpillars ate 
the thatched roofs, causing the roofs to cave in. Moreover, 
DDT-poisoned insects were eaten by geckos, which were eaten by cats. 
Eventually, the cats started to die, and the rats multiplied, 
threatening potential outbreaks of typhus and plague. The World 
Health Organization, therefore, engaged a Singapore squadron of the 
British Royal Air Force to parachute 14,000 live cats into Borneo!

This story has become well-known worldwide as a splendid example of 
how - if one doesn't understand hidden connections - the cause of 
problems can often be solutions. What my fifty colleagues and I try 
to do at Rocky Mountain Institute (RMI) is to understand and harness 
those hidden connections so that we can solve or avoid a problem 
without making new ones.

Let's take energy as an example. Energy is connected to just about 
everything. Improving energy-efficiency is far more sensible and 
provides higher-quality services than simply supplying more energy. 
Energy-efficiency is the fastest-growing major energy source in the 
us, increasing by more than 3% a year.

The big surprise about saving energy and other resources is that we 
can now make very large savings cost less than small or no savings. 
My own house is an interesting example. It's 7,100 feet up in the 
Rockies, where temperatures can drop to -47ˆÄ. Frost can occur any 
day of the year, and we can get thirty-nine days of continuous 
mid-winter cloud. So, not a terribly nice climate. Nevertheless, 
coming in from a snowstorm, one can be right in the middle of a 
jungle of jasmine, bougainvillea and frogs; we've harvested 
twenty-seven banana crops in the greenhouse. Yet, we don't have a 
heating system - because we don't need one.

Now, if you were to ask an engineer how much insulation you should 
have in your house in a very cold climate, you'd be told, "Just as 
much as will pay for itself over the years from the saved heating 
bill." That sounds logical. But that logic is wrong because it leaves 
out something rather important: the capital cost of the heating 
system. A furnace, pipes, pumps, ducts, fans, wires, fuel source, 
controls, etc. are needed to provide heat. It turns out that 
construction costs are lower up-front by not having to install any of 
that stuff; rather, by installing superinsulation and superwindows to 
trap heat, and air-to-air heat recovery systems for ventilation, the 
whole house gets cheaper to build.

The saved construction budget can then be spent in other ways to 
produce more efficiency, and ultimately savings, throughout the 
house: in our case, saving half the water, 99% of the water-heating 
energy, and 90% of the household electricity, for which the bill for 
4,000 square feet is five dollars a month. (We actually make five or 
six times that much electricity with solar power and sell the rest 
back to the utility at the same price.) The house uses only as much 
electricity as one ordinary light bulb. All of those savings paid for 
themselves in ten months with 1983 technology. Today we can do a lot 

BIG ENERGY and resource savings would, of course, happen faster if 
each of the sixty or eighty specific known obstacles to buying energy 
efficiency were turned into a business opportunity. For example, 
wouldn't it be a neat idea to pay architects and engineers for what 
they save, not for what they spend? We tried that in five 
experiments, and it works very well. Or how about rewarding your 
electric or gas utility for cutting your bill, not for selling you 
more energy?

In designing our house, we were optimizing the house as a system, 
rather than just as a collection of separate components. We paid more 
for the windows than for ordinary windows, and we'd paid for 
components that weren't ordinarily there, like recovering heat from 
the outgoing air to pre-heat the incoming air. But we'd saved a lot 
more cost than that by getting rid of the heating system. So we were 
optimizing the whole house for multiple benefits, saving energy costs 
and capital costs, not just energy.

The car - the highest expression of the Iron Age - is another example 
of optimizing whole systems. The car has been around for over one 
hundred years and is really a remarkable machine. It does difficult 
things quite well. Yet it uses only 1% of its fuel energy to move the 
driver. We can do better than that. Ten years ago, I figured out how: 
make the car three times lighter by using carbon fibre, instead of 
steel; make it very low in drag, thereby requiring only a third as 
much power to make it move; convert it to hybrid-electric drive 
(meaning you run the wheels with electric motors but generate the 
electricity onboard from fuel). This way the car gets even lighter, 
simpler and cheaper. It's ideally suited for the most efficient, 
reliable and clean power source we know, namely a hydrogen fuel cell, 
which changes hydrogen into electricity, hot water, and nothing else. 
I like the idea of just hot-water emissions so much that I am 
thinking of mounting a coffee machine in the dashboard!

I've been having a lot of fun with this idea of an ultralight, 
ultra-low-drag, hybrid-electric car with highly integrated and 
radically simplified software-rich design. It's called a HypercarTM. 
In 1991-1993, I explored with General Motors and other auto-makers 
whether the concept would actually work and be a good idea. It did 
show promise, but I didn't much like the idea of patenting and 
auctioning the intellectual property in the hope that a single buyer 
would succeed with it - and not sit on it, which they'd have every 
reason to do.

Therefore, in 1993, I put the work in the public domain so that 
nobody could patent it, which caused everyone to fight over it, for 
fear their competitors would do it first. By the end of 2000, about 
$10 billion had been committed by the automotive industry to this 
general line of development.

In 1998 seventeen industrial partners joined RMI in funding a 
feasibility study at Lotus Engineering in the UK. That turned out 
well. So in 1999, RMI did its fourth for-profit spin-off, called 
Hypercar, Inc. I never expected to be chairing a car company, but 
life's full of surprises. Hypercar, Inc. has designed a mid-size 
sport-utility vehicle (SUV) that will hold five adults and up to 
sixty-nine cubic feet of cargo. It will haul a half-ton payload up a 
44% gradient; it travels zero to sixty mph in 8.2 seconds. All with 
very little energy - equivalent to 2.38 litres of petrol per 100 km 
(99 miles per US gallon) - because it weighs less than half as much 
as a similar, normal-construction vehicle. It can cruise at 55 miles 
an hour on the same energy that a normal SUV uses just for its air 
conditioner. This makes it ideal for a hydrogen fuel cell because the 
fuel cell becomes small enough to afford, and the hydrogen tanks 
become small enough to fit. Therefore, such a vehicle can drive for 
330 miles on just 71Ž2 pounds of hydrogen.

When such cars are widespread - and they could enter volume 
production in 2005 or 2006 - they will ultimately save as much oil as 
OPEC now sells. They will decouple driving from climate and smog, 
although not from congestion. They can also be designed so that when 
they are parked - cars are typically parked 96% of the time - they 
can be plugged into a building as a power-plant-on-wheels. In other 
words, the electricity generated onboard the car can be sold back to 
the utility, earning back much of the cost of owning the car.

It doesn't take many of us doing this to put the coal and nuclear 
plants out of business: a full fleet of such Hypercar vehicles will 
ultimately have about six to twelve times as much generating capacity 
as all the electricity companies now own. This approach can deal 
profitably with roughly two-thirds of the climate problem - one-third 
from road-vehicle emissions, and another third from power-plant 
emissions. It's an interesting example of how consequential a change 
in design can be.

A lot of our work at Rocky Mountain Institute is about a different 
way of doing business, so that nature and people are properly valued. 
What we call 'natural capitalism' is the productive use of and 
reinvestment in capital; but recognizing rather than only two forms 
of capital - money and goods - it also harnesses the other two kinds 
of capital - people and nature.

In the first Industrial Revolution, the relative scarcity of people 
was limiting progress in exploiting seemingly boundless nature; it 
made sense to use people a hundred times more productively, and we 
did - a previously unknown concept. Today, we have the opposite 
pattern of scarcity: we have abundant people and scarce nature. Now 
it makes sense to work with nature ten or a hundred times more 
productively. This radically-improved resource productivity is the 
first of four operational principles of natural capitalism: it does 
much more - and better - with less for longer.

The second principle of natural capitalism is a shift to 
biologically-inspired production models (biomimicry), i.e. closed 
loops with no waste and no toxicity.

The third principle is to adopt a business model that actually 
rewards both the provider and the customer for following the first 
two principles. It's called the 'Solutions Economy'.

Fourthly, capitalism reinvests profits into productive capital. 
Typically, the most productive place to reinvest is in the capital 
we're shortest of. Let's reinvest in nature. Let me give you an 
example of how these principles come together.

Interface, an Atlanta-based worldleader in interior finishes, 
furnishings and fabrics, has added $165 million to its bottom line by 
minimizing waste. Interface is systematically eliminating everything 
it sends to landfill, or up a stack, or out through a pipe. The idea 
is eventually to have no stacks, no pipes, no landfill. Not just 
less, but none. No waste, full stop. This provides 27% of the firm's 
operating profit.

When Interface adopted the other principles, the story gets even more 
interesting. For example, the firm designed a new kind of floor 
covering called Solenium‡žthat contains nothing toxic. Since there's 
no chlorine in Solenium, there's no risk of the release of toxic 
fumes in a fire. There are no endocrine disrupters, either. It 
doesn't stain; it doesn't mildew; it feels good underfoot; it has 
good aesthetics and acoustics; and it also lasts four times longer 
than regular carpet, yet takes 35% less material per square metre - a 
seven-fold reduction in the amount of material needed to cover a 
certain area for a year.

Solenium is also designed to be completely remade into an identical 
product with no loss of quality, so it permits a novel business 
model. Currently, when an office is recarpeted, it closes down, 
furniture is moved out, a big roll of carpet is installed using toxic 
glues; furniture is put back; and employees move back in, often 
getting sick from the glue fumes. After a decade or so, it looks worn 
and has to be replaced all over again, sending all of the old carpet, 
worn or not, to the rubbish-tip for 10,000-20,000 years. This is an 
especially odd way to use oil because you never even wanted to own a 
carpet in the first place: all you wanted to do was walk on it and 
look at it.

Interface is therefore starting to lease floor-covering services, 
rather than selling carpet. Every month its little elves come in the 
night: they inspect your floor; they take away the worn carpet tiles; 
and they install fresh ones to areas as needed. Generally about a 
fifth of the area in the office actually gets traffic; carpeting 
under furniture doesn't need to be replaced as often as does 
carpeting for the walked-on areas, so that's a total 35-fold, or 97%, 
reduction in the flow of materials across your floor. The result: 
better service, which is tax-deductible as an operating lease. 
Incidentally, when enough carpet tiles come back to the factory, they 
are remanufactured for a 99.9% saving in materials. How are 
competitors going to fare against a carpet company that uses a 
thousandth as much material and a tenth of the capital to produce a 
better service at a higher profit but a lower cost and tax-deductible 
to the customer? They're not! This is an example of the kind of 
stunning competitive advantage that natural capitalists get.

The fourth principle of natural capitalism is to reinvest in natural 
and social capital. At Interface, this is already under way. The 
petroleum-based ingredients in the recipe for Solenium will be 
substituted with corn stover. The corn will come from low-income 
farmers using organic practices that restore the soil and who also 
get paid for taking carbon out of the air and putting it back in the 
topsoil where it belongs. In other words, reinvesting in natural and 
social capital. That will be, I think, the further development of the 
natural capitalism story.

In the first four years on this path, Interface more than doubled its 
revenues, more than tripled its operating profits, and nearly doubled 
its employment all the while - substituting abundant people for 
scarce nature. Its workers get really excited about this because they 
feel that there's no longer any contradiction between what they're 
doing on the job and what they want for their families when they go 
home. When you run a business that way, there's an incredible 
outpouring of energy, initiative and enthusiasm at all levels of the 
company; and neither the managers nor the competitors can keep up.

On that basis we actually spread natural capitalism as a kind of 
beneficial social virus. We use competition to do our outreach. It's 
really very simple. We just work with early-adopting companies and 
help them achieve such conspicuous success as natural capitalists 
that their rivals are forced to decide whether they want to lose 
market share or follow the example. It really works.

Extracts from a lecture given at the Resurgence/Omega conference in 
New York, September 2001.

Amory Lovins is Director of Rocky Mountain Institute,1739 Snowmass 
Creek Road, Snowmass, Colorado 81654, USA.
He is author of Natural Capitalism.

For more information visit the following websites: www.rmi.org, 
www.natcap.org and www.hypercar.com.

from Resurgence issue 213

Biofuel at Journey to Forever:

Biofuels list archives:

Please do NOT send Unsubscribe messages to the list address.
To unsubscribe, send an email to:
Yahoo! Groups Links

<*> To visit your group on the web, go to:

<*> To unsubscribe from this group, send an email to:

<*> Your use of Yahoo! Groups is subject to:


Reply via email to