Growing evidence suggests that the global economy is now destroying its own ecological base and offering little to billions of impoverished people. In response, pioneering policymakers, business leaders and concerned citizens around the globe are creating the architecture of sustainable economies, one innovation at a time

Summary

Seven principles of a sustainable global economy,

1. Adjust the scale of economic activity to fit within boundaries set by the natural environment.
   
2. Make prices tell the ecological truth, by incorporating environmental costs into the price of goods and services.
   
3. Shift the goal of economies from growth to development, by focusing on generating greater levels of well-being.
   
4. Account for nature's economic contributions through a full assessment and valuation of nature's services.
   
5. Apply the precautionary principle to economic activity.
   
6. Revitalize ancient principles of commons management to govern resource use in an increasingly crowded world.
   
7. Properly value the extensive contributions women make to any economy.
   

Rethinking Production
Chapter 3
Key Messages
The Problem
Innovations/Solutions

Looking Ahead

• Business leaders and policymakers need to rethink the design and production of products and services to offer consumers a higher quality of life while also addressing social and environmental problems.
  
• Meeting human needs with goods and services that useless energy and fewer materials can be more profitable and deliver a higher standard of living than current practices.
  
• Production practices that raise resource efficiency, circulate materials, and imitate nature offer a new model of prosperity for today's environmentally degraded and poverty-stricken planet.
  

The Challenge of Sustainable Lifestyles
Chapter 4
http://www.worldwatch.org/files/pdf/SOW08_chapter_4_brief.pdf

Improving the efficiency of technology
Stabilizing the human population
Changing lifestyles

• Economic growth has delivered 'islands of prosperity' to millions of people, but has left 'oceans of poverty' and unsustainable stresses on the global environment in its wake.
  
• Relieving this pressure will require technological efficiency gains, population stabilization, and changes to our lifestyles and aspirations.
  
• All of these are achievable and could lead to widespread improvements in the quality of life.
  

Innovations for a Sustainable Economy
Industrial Production
Agriculture
Species Conservation
Property Regimes & Commons Management
Investing for Sustainability
Measuring Wealth and Wellbeing
http://www.worldwatch.org/node/5560

Sustainable Economies
http://www.worldwatch.org/files/pdf/SOW08_chapter_1.pdf
In Chapter 1 of State of the World 2008, project co-directors Gary Gardner and Tom Prugh highlight seven principles of a sustainable global economy, which underlie the work of innovation pioneers concerned about environmental degradation and widening income inequality:

Adjust the scale of economic activity to fit within boundaries set by the natural environment.

Make prices tell the ecological truth, by incorporating environmental costs into the price of goods and services.

Shift the goal of economies from growth to development, by focusing on generating greater levels of well-being.

Account for nature's economic contributions through a full assessment and valuation of nature's services
Apply the precautionary principle to economic activity.

Revitalize ancient principles of commons management to govern resource use in an increasingly crowded world.

Properly value the extensive contributions women make to any economy.

State of The World 2008

Rethinking Production
Chapter 3
Key Messages
The Problem
Innovations/Solutions
Looking Ahead
http://www.worldwatch.org/files/pdf/SOW08_chapter_3_brief.pdf

Key Messages

• Business leaders and policymakers need to rethink the design and production of products and services to offer consumers a higher quality of life while also addressing social and environmental problems.
  
• Meeting human needs with goods and services that useless energy and fewer materials can be more profitable and deliver a higher standard of living than current practices.
  
• Production practices that raise resource efficiency, circulate materials, and imitate nature offer a new model of prosperity for today's environmentally degraded and poverty-stricken planet.
  

The Problem

Modern industrial economies extract raw materials from mines, oil wells, and forests, push them through factories to create finished products for consumers, and send them rapidly to landfills. At all stages of the process, this linear production system is riddled with waste, including pollution to air and water, factory inefficiencies, consumer packaging, and landfills.

From an economic perspective, waste is the inefficient use of resources. This inefficiency is not apparent in the prices of products and services because natural resources are often subsidized or essentially free. When an input is cheap, waste is regarded as costless as well. In contrast, labor and capital-for centuries the most costly inputs to capitalist production-have received the bulk of economic attention.

Today, however, the relative scarcity of inputs has changed. Labor and capital remain costly, but the loss of vital services that ecosystems provide-such as pollination, flood protection, and a stable climate-is increasingly a constraint on economic activity. Shortages of some natural resources, such as copper or lumber, have not yet been of great concern, in part because our voracious economy has become ever-more effective at extracting them. But flows of many other critical resources are now slowing: oil extraction
may soon reach its peak, and oceanic fish harvests are constrained not by a lack of boats, but by a scarcity of fish.

Creating sustainable economic activity cannot be achieved unless policymakers and business leaders employ three main strategies:

first, use resources far more productively;
second, redesign products and how they are made;
and third, manage all institutions to be restorative of
human and natural capital.

Innovations/Solutions

Books such as Natural Capitalism and organizations like the World Business Council for Sustainable Development have shown that our use of energy and materials can be increased by a factor of 4 to 10, using new technologies such as efficient LED lighting and practices such as clean production and lean manufacturing. Mastering efficiency saves real money: by 2007, the chemical company DuPont had cut emissions 72 percent below 1991 levels, saving itself $3 billion in the process.

Designing products and materials to circulate through an economy again and again-the "cradle-to-cradle" approach to product development and use-emerged from a key insight decades ago by Walter Stahel of the Product-Life Institute in Geneva. Stahel wrote that some three-quarters of the energy used in industry is expended in mining or producing basic materials such as steel and cement, and only about 25 percent is used to convert these materials into finished goods like machines or buildings. Conversely, three timesas much labor is used to convert materials into higher value-added products as in the original mining.

The bottom line: if economic activity were focused on reconditioning or reprocessing old products instead of making new ones, economies would use less energy and create more jobs.

By the time most human products have been designed (but before they have been built), 80 to 90 percent of the economic and ecological costs they will generate over their lifetimes have already become inevitable. The emerging field of biomimicry, however, shows that "doing business as nature does it" can deliver cheaper and superior products with far less environmental impact. Unlike the "heat, beat, and treat" approach of modern industry, nature runs on sunlight, not high flows of fossil energy. It makes very dangerous substances, but nothing like nuclear waste, which remains deadly for millennia. And it creates no waste, using the output of all processes as the input to some other process. Nature shops locally and creates beauty. Innovative manufacturers are embracing biomimicry.

Researchers at Sandia Labs in the United States have mimicked the way abalone build seashells to create mineral/polymer layers that are optically clear but almost unbreakable, for use as coatings to toughen windshields, airplane bodies, and other products that need to be lightweight but fracture-resistant. And EcoCover Ltd. of New Zealand produces a biodegradable mulch mat as an alternative to plastic landscaping sheeting that helps gardeners prevent moisture loss and weed growth naturally.

These are just two of many companies that have taken biomimicry to heart in design and production processes.

Looking Ahead

Since the first industrial revolution, at least six waves of innovation have emerged, each based on new technologies that underpin economic prosperity. Today, as in previous eras, older industries will become less competitive unless they join those implementing the array of sustainable technologies and innovative practices that comprise the next wave of innovation.

Companies that implement resource productivity and sustainable production strategies-such as biomimicry and cradle-to-cradle-can improve every aspect of their shareholder value. Increasing shareholder value in this way requires the adoption of an "integrated bottom line" that recognizes the contribution of environmental and social performance, in addition to financial performance, to a
company's worth. Companies that do so are among the most competitive today. In 2007, the investment bank Goldman Sachs released a study showing that companies with strong environmental, social, and governance policies outperformed the stock market in general by 25 percent.

And 72 percent of the companies on the list outperformed their industry peers.

This brief is based on Chapter 3, "Rethinking Production," by Hunter Lovins,

The Challenge of Sustainable Lifestyles
Chapter 4
http://www.worldwatch.org/files/pdf/SOW08_chapter_4_brief.pdf
Improving the efficiency of technology
Stabilizing the human population
Changing lifestyles

• Economic growth has delivered 'islands of prosperity' to millions of people, but has left 'oceans of poverty' and unsustainable stresses on the global environment in its wake.
  
• Relieving this pressure will require technological efficiency gains, population stabilization, and changes to our lifestyles and aspirations.
  
• All of these are achievable and could lead to widespread improvements in the quality of life.
  

The Problem

The modern economy has delivered remarkable affluence to hundreds of millions of people worldwide. But the staggering economic growth behind this wealth generation has inflicted dangerous costs on the environment, even as billions more aspire to the same high standard of living.

How can a world of finite resources and increasingly tight environmental constraints support the expectations of 9 billion people (the mid-range population estimate for 2050)? Will they be able to live the lifestyle of the affluent West and the developed nations, especially when much of the Earth's "environmental space" has been captured by the wealthy through their use of the world's resources?

Innovations /Solutions

Freeing up environmental space for the poor, by reducing the impacts of economic activity, can be done in three ways: Improving the efficiency of technology Great gains have been made in this area in recent years and enormous further gains are possible-in energy especially, but also in manufacturing, city planning and design, and so on. Some experts believe that resource efficiency-the amount of "bang for the buck" from resources invested-can be improved by a factor of 10 or more.

Stabilizing the human population

Every environmental pressure is worsened by rising numbers of people. Hopeful signs can be seen in the many countries that have approached or achieved the "demographic transition," which yields steady or even declining populations. Nevertheless, the planet's total population is now approaching 7 billion and is expected to reach 9 billion or so by 2050.

Changing lifestyles

With population set to increase, and even major technological efficiency improvements unable to do the job alone, easing the economic pressure on the global environment will mean adjusting our consumption patterns and changing our lifestyles, especially in the wealthiest nations.

None of this means accepting a lower quality of life. New research over the last 25 years or so has made it
increasingly clear that ever-greater consumption is not only a false path to a fulfilling life, it can actually be harmful. Data from around the world suggest that, at lower levels of per capita income, more money can increase life satisfaction.

But in countries where per capita income is over $15,000, there is virtually no connection between the two: more money does not improve life satisfaction.

The same effect can be seen within countries over time. Real per capita income in the United States, for instance, has tripled since 1950, but the percentage of people who say they are very happy has actually declined since the 1970s.

Other evidence-such as the rising rates of obesity and depression-suggests that too much wealth can actually translate into increased unhappiness. Highly materialistic people who define themselves through their money and possessions tend to report lower levels of happiness than others. And there appears to be a correlation between rising consumption and the erosion of things that really do make people happy, such as family stability, friendship, trust in others, and strong communities, which are declining in many wealthy countrie.

Looking Ahead

To attack these problems and achieve sustainable consumption patterns-that is, living well within certain limits-requires a supportive social environment. All sectors of society can help to create this, but governments are the chief agents for protecting the social good and must take the lead.

Governments must set policy so as to support an infrastructure of sustainability: public transport, recycling, energy efficiency services, and so on. They must establish fiscal and institutional frameworks that send consistent signals to businesses and consumers about sustainable consumption-such as firmly setting a "social cost of carbon" to encourage internalizing the true cost of fossil fuels in market prices.

Regulations that support development of durable and efficient products will also help move us toward a sustainable energy regime.Government policies already play a large role in influencing peoples' values, and that influence can be turned to sustainable ends. One example is government procurement policies: in many countries, government is the largest single purchaser of goods and services and can set production guidelines for these that support sustainability. Governments can also tap the many new indicators of wellbeing, beyond GDP, that better reflect whether policies or businessinitiatives actually make people better off. One particularly crucial arena for action lies in advertising, one of the key drivers of the consumerist treadmill. São Paulo, Brazil, the fourth largest city in the world, has banned outdoor advertising.

Mindful of the pernicious power of ads aimed at children, including their role in rising childhood obesity, Sweden has banned TV advertising to kids under 12. The consumer society offers neither a durable sense of meaning in people's lives nor any consolation for losses.

Many individuals, communities, and political leaders are beginning to initiate a change, and millions have already discovered that treading more lightly on the Earth allows them to breathe more easily, in more ways than one.

State of the World 2008
Innovations for a Sustainable Economy
Industrial Production
Agriculture
Species Conservation
Property Regimes & Commons Management
Investing for Sustainability
Measuring Wealth and Wellbeing
http://www.worldwatch.org/node/5560

Innovations for a Sustainable Economy

• Corporate R&D spending on clean energy technologies reached $9.1 billion in 2006. Venture capital and private equity investment in clean energy totaled $8.6 billion in 2006, 69 percent above the 2005 level and 10 times the 2001 level.
  
• Average auto efficiency standards will soon rise to 47 miles per gallon in Japan and 49 miles per gallon in Europe. Biofuel production has grown by 20 percent per year since 2005.
• Australia, China, and California plan to phase out the use of most incandescent light bulbs, which would be replaced by compact fluorescent bulbs that are four times as efficient.
  
• The government of Germany announced plans to shut down its centuries-old hard coal industry by 2018.
  
• Global trade of carbon allowances has increased rapidly, from 328 million tons of CO2 equivalent in 2005 to 1,131 million tons in 2006.
  

Industrial Production

• Innovative companies are revolutionizing production processes. Chemical giant DuPont, which is committed to sharp reductions of greenhouse gas emissions, cut emissions 72 percent below 1991 levels by 2007 and saved $3 billion in the process.
  
• EcoCover Limited of New Zealand has used biomimicry principles to develop a biodegradable mulch mat made from "upcycled" shredded waste paper bound with fish paste. The product, a substitute for black plastic sheeting, reduces the need for chemical garden care, conserves water, improves soil, and diverts fish waste and waste paper from landfills.
  
• Researchers at Sandia Laboratories have mimicked the internal processes of abalones to develop mineral/polymer-layered structures that are optically clear but almost unbreakable.
  

Agriculture

• A 2003 Swedish study found that beef cattle raised organically on grass emit 40 percent fewer greenhouse gases and use 85 percent less energy to make beef than cattle fed on grain.
  
• A recent two-year study found that sows raised in hoop houses had more live births than those in confinement facilities. Researchers found that group housing could reduce production costs by as much as 11 percent compared with use of gestation crates.
  
• In Norway, several large salmon farms have learned that introducing "cleaner" fish into pens dramatically reduces lice and feed wastage, and that the cleaner fish can later be harvested for fishmeal; salmon production remains the same while waste drops by more than half, the incidence of disease drops, and the farm harvests two or three additional crops. Another Norwegian study found that small-scale fisheries generate five times as many jobs per unit of landed value than large-scale fisheries.
  
• Farmers practicing rice-field culture in Bangladesh have managed to reduce production costs by 10 percent, and the average farm income has increased 16 percent in just three years.
  
• Smithfield announced in 2005 that it would only buy from suppliers who did not use antibiotics on their animals, and in 2007 Tyson Foods announced that the birds it sells to U.S. grocery stores and restaurants would no longer be treated with antibiotics.
  
• Wal-Mart announced that within three to five years it would be certifying that all its seafood for the North American market was raised sustainably.
  

Species Conservation

• An estimated 400+ "wetland banks" throughout the United States handle more than $3 billion per year in transactions, and more than 70 species banks (conservation banks) trade as much as $370 million in species credits each year.
  
• Vulcan Materials Corporation in California set up a conservation easement on its land, prime habitat for the endangered Delhi Sands Flower-loving Fly, and opened a bank selling "fly habitat credits" to needy developers.
  
• In South Africa, Columbia, and the European Union, laws requiring or encouraging biodiversity offsets are either being considered or already implemented.
• China's Grain for Green program redistributes tax revenues to farmers to keep hillsides forested; it aims to conserve watersheds and prevent floods, but also helps protect species.
  

Property Regimes & Commons Management

• Economists generally argue that a resource not exploited under a private property regime is destined for overuse, but numerous commons management regimes, some centuries old, prove otherwise. On Bali, rice farmers coordinate their use of scarce water cooperatively through social networks, resulting in a near-ideal allocation in terms of farm productivity.
  
• Commons management ideas are rebounding and finding new applications. Wikipedia, which is based on a collectively managed social network, now has almost 8 million articles in English and 250 other languages.
  
• Collectively managed community gardens are increasingly popular, with an estimated 18,000 gardens in the United States alone. Likewise, the number of farmers markets grew 150 percent between 1994 and 2006, and today there are well over 4,000 in the United States.
  

Investing for Sustainability

• The Equator Principles have been endorsed by 54 signatory banks and represent over 85 percent of global private project finance capacity. According to the U.N., global venture capital and private equity investment in sustainable energy totaled $8.6 billion in 2006, up 69 percent from $5.1 billion in 2005, with the number of deals increasing by 12 percent.
  
• There are now 575 environmental and energy hedge funds. Global "clean-tech" capital investment increased by 78 percent in 2006 to $2.9 billion, making it the third-largest venture investment category (and the third largest such sector in both China and the United States).
  
• Currently about 2,500 of the nearly 15,000 sustainability reports on file at CorporateRegister.com comply with Global Reporting Initiative's guidelines, the generally accepted accounting principles for disclosing environment, social, and governance info.
  
• More than 300 institutional investors representing over $41 trillion in assets have signed onto the fifth iteration of the Carbon Disclosure Project, which asks 2,400 of the world's largest companies to voluntarily report their carbon emissions and management processes.
  

Measuring Wealth and Wellbeing

• Bhutan has made "gross national happiness", not economic growth per se, its official goal.
  
• Interest in ways to promote human wellbeing is widening among policymakers, with wellbeing now a national policy goal in Australia, Canada, and the United Kingdom.
  
• A recent global assessment found green accounting programs in place in at least 50 countries and identified at least 20 other countries that were planning to initiate such programs soon.