As of today, it seems the only closed loop system that exists is our planet, Earth, as a whole. We live in a planet where our economy continues to grow exponentially. Not too long ago, we surpassed a world population of 7 billion and our population is only growing by the minute. Our most valuable scare resources continue to be depleted from Earth to meet the demand of our consumption levels. We continue to ignore the value of our natural resources and its services while also disregarding the externalities and effects our forms of production and waste cause on our environment. If we are serious about maintaining a sustainable planet, a state where Earth can continue to reproduce the natural resources we consume and provide us with the natural services for our existence, our businesses, our consumers and our government must come together and engage in practices that will help reduce our ecological footprint on Earth to a sustainable economy and possibly a steady-state economy, a state where our economy will be sustained at a scale where it will not expand nor be reduced as consumption and depletion of our natural resources and even population would remain constant. In other words, our economy would remain a subsystem of our ecosystem and remain at a constant optimal size where our ecosystem can continue to produce the natural goods and services to sustain our economy. So far, the readings, the studies discussed in class and the guests that have come in to our class have given me some hope to view our planet as a potentially sustainable economy. It sure won’t be easy but I prefer to remain optimistic.
There are several steps we need to follow to shift to a sustainable economy. First, our government, a major influential vehicle, needs to provide an environment to encourage and force businesses to shift towards sustainable forms of production through policies, laws and regulations. The government can provide incentives and also reform their tax framework encouraging businesses to gradually shift to a sustainable state of production. Once the environment for sustainable production is set, businesses will be the next major contributor to make their shift to produce and provide goods and services that have minimal or no effect on the environment. Through innovation and technology, businesses would shift to produce goods and services that meet the shift in consumer attitudes for goods and services that are eco-friendly, a shift that has been recorded through surveys, as the Sustainable Consumption Facts and Trends article states, and leads me to my third step. The third, and equally important, goal to fulfill the shift to a sustainable form of lifestyle would be to influence and significantly change our consumers’ behavior of consumption, encouraging consumers to request and purchase products and services that are healthy and sustainable for our ecosystem. Though very complex, these three major components of our economy must be willing to work together to gradually shift our economy to a sustainable steady-state that will allow us to extend human existence here on Earth.
First, government and businesses must come together and communicate on the best ways to move forward with sustainable business practices. To begin, the government could make some changes to its tax system to provide businesses shifting to sustainable forms of production financial benefits including tax break incentives to encourage them to invest in improved, sustainable forms of production both for their own financial benefits and for our ecosystem’s sake. As Robert Ayres, in the Natural Capitalism book, said, many of our economic issues, including environmental degradation, could be solved by restructuring our current tax system to “increase the tax burden on activities that damage the social or natural environment, so as to discourage such activities and reduce the resulting damage.” In other words, businesses shifting to forms of production that are environmentally friendly would avoid these tax burden, avoid higher costs of production and retain or increase their profits. In addition to these tax break incentives, the government should also consider stopping any subsidies to businesses that continue to engage in non-ecofriendly forms of production including some agriculture production which at times can degrade the soil and produce crops that cause diseases and death, as described in chapter 8 of NatCap. Instead, the government should engage in subsidizing companies that are in need of funds for new sustainable technology innovation, encouraging a cleaner and healthier form of production from businesses.
As the environment for sustainable business practices is set by the government, businesses, then, are next and, equally responsible, to follow through and begin practicing environmentally friendly forms of production. Ideally, it would be best to shift to a closed-loop system, where all natural resources used in the production of the product or service are renewable, recyclable and no waste is produced. This shift is one of four critical steps mentioned in the Systems Thinking Primer for Natural Capitalism article on how to shift to a sustainable economy. With innovation, new advanced technology and changes in their production strategies it’s potentially possible to shift many businesses towards a closed-loop system where no waste is produced. One very good and close example to this model is Phil’s farm. Phil’s farm collects water for his crops and cattle by collecting the water that runs down the hills, avoiding pulling water in from elsewhere. Phil also mentioned feeding his cattle any unsold vegetables, another example on how waste is recycled. This closed-system is vital for businesses in its efforts to move to a sustainable economy.
Another vital shift mentioned in System Thinking Primer for Natural Capitalism associated with the businesses would be a shift to a Service & Flow Economy. In this business model businesses would be expected to maintain ownership of the goods produced, encouraging recycling when the productive life of the good is over and remanufacturing of the goods, when needed. This model would eliminate wasteful production on the consumer’s side by leasing the goods instead of selling them and expecting the consumer to refurnish the good to be reused. An example of a business that practices this sustainable business cycle is the carpet company, Interface, where their carpet is leased, replaced by sections and remanufactured for reuse, avoiding the production of waste. If more businesses followed this model our ecological footprint by our businesses would dramatically be reduced.
Natural capitalism is also vital for the continuance of businesses and retention of our ecosystem’s natural resources and services. In order for several of these businesses to remain in production these businesses need the continued flow of the natural resources for their products. In order to maintain a constant flow of these goods, it’s in the business’ best interest to invest in natural capitalism and reproduce the same natural resources that are being consumed to produce their goods. Doing so would replenish the natural resources consumed and avoid complete depletion of these goods and potentially an end to the business if those natural resources cannot be substituted by another resource. Ultimately, the business would be making a long term investment for its own business as they invest in the reproduction of the resources required for their production, another vital shift listed in Sustainable Thinking Primer for Natural Capitalism to shift to a sustainable economy.
Lastly but not least, consumers, the third component and the main subjects of the economy that demand and consume the products produced in the economy by the business, need to make some dramatic changes to their behavior. Though a large percentage of people claim that they are environmentally conscious and would like to go “green”, many don’t. Their behavior doesn’t translate into actions. As Elizabeth Keenan explained in her presentation, there is a big difference between attitude and behavior. Many consumers won’t change their consumption or lifestyle unless it’s both cost-efficient and convenient. As shown in figure 19 on the Sustainable Consumptions Facts and Trends article, the top four reasons why consumers are unwilling to pay more for products and services that are better for the environment include lack of understanding of the problem/thread/value, comfortable lifestyles/greed, associated high costs and selfishness. These are definitely tough barriers that need to be addressed and dealt with if consumer behaviour is expected to change. Educating our consumers of the benefits and costs associated with a variety of products does seem logical but as Elizabeth Keena mentioned, changing behavior is difficult. Knowledge and awareness does not equal sustainable behavior.
Gladly, behavior is gradually changing. As people become more aware of the negative effects of some products and services on our environment either through word of mouth or other sources some people are shifting to consume products that are more ecofriendly. Businesses are producing more and more ecofriendly products to meet these demands. As Elizabeth Keena stated, there was a 73% increase in ecofriendly products in one year recently. An increase in supply of these goods is also a reflection of consumer demands. More and more consumers are consuming organic foods, using environmentally friendly cleaning products, etc.
Though some slight changes in consumer behaviors have been shifting to more environmentally friendly products, businesses and the government still have a long road ahead to make the necessary behavior changes for a sustainable economy. As major forces in our economy, businesses and the government should take a leadership role and continue to educate the consumers of the environment benefits of its products, superiority and health benefits. As mentioned in the Sustainable and Consumption Facts and Trends article, businesses need to engage in effective marketing strategies and advertising to reduce the gap between innovation and consumer demand. This would help consumer adopt new technologies or new sustainable products quicker. In addition, marketing products that more ecologically conscious can also improve the company’s brand and maintain its image in corporate sustainability while improving sales and profits.
Our planet’s ecosystem is degrading and it will only continue to do so at higher rates unless our government, businesses and consumers work together and shift to a sustainable level of production and consumption. We first must start with our government. An influential and powerful vehicle for change must come from the top down. It’s agreed that consumers create the supply of good, however, with greed, poverty, lack of knowledge and deep self-interest by the consumers it would be very difficult to expect changes to develop from the bottom down. If governments and businesses come together and take on an ethical responsibility along with the leadership to shift our current uneconomic economy to a sustainable economy, consumers could gradually follow and adopt sustainable practices as more and more individuals jump on board. The shift in behavior has been gradual but this phenomenon and change is present. If our efforts continue to expand, our government, businesses and consumers, we can potentially move to a sustainable state economy before it’s too late.
