Tuesday, July 31, 2007

RMI’s 25th, and Amory Lovins’ Clarity

Natural Capitalism was a highly influential book for me. Throughout high-school I struggled on my own to makes sense of the complexity surrounding our market economy, and why it was failing us. As I discovered solutions-based, proactive means for addressing the social and ecological unsustainability we face, like organic agriculture and green building – better ways of doing things that made economic sense when done properly – I knew there had to be a way to scale them up. When I got my permaculture certification, and engaged in systems thinking in an intentional way for the first time, I was closer to being able to articulate how this could be done – the solutions were there and were so elegant with smart design of the systems we use to meet our needs. I felt like I was on the cusp of figuring something out, when I read Natural Capitalism and discovered that it had already been done – and far from a theoretical fantasy, the whole book is case studies of effective, profitable, solutions-based activities that result from taking a whole-system approach to design (of buildings, cities, water systems, products, etc…)

I reminisce because this year is the 25th anniversary of the Rocky Mountain Institute and Grist just ran a great article with Amory Lovins. I highly encourage you to read the whole thing:


Some highlights:

On the economics of nuclear vs. micropower:

We see this now in the electricity business. A sixth of the world's electricity and a third of the world's new electricity comes from micropower* -- that is, combined heat and power (also called cogeneration) and distributed renewables. Micropower provides anywhere from a sixth to over half of all electricity in most of the industrial countries. This is not a minor activity anymore; it's well over $100 billion a year in assets. And it's essentially all private risk capital.

So in 2005, micropower added 11 times as much capacity and four times as much output as nuclear worldwide, and not a single new nuclear project on the planet is funded by private risk capital. What does this tell you? I think it tells you that nuclear, and indeed other central power stations, have associated costs and financial risks that make them unattractive to private investors. Even when our government approved new subsidies on top of the old ones in August 2005 -- roughly equal to the entire capital costs of the next-gen nuclear plants -- Standard & Poor's reaction in two reports was that it wouldn't materially improve the builders' credit ratings, because the risks private capital markets are concerned about are still there.

On the competiveness of liquid coal:

I think a good way to smoke out corporate socialists in free-marketeers' clothing is to ask whether they agree that all ways to save or produce energy should be allowed to compete fairly at honest prices, regardless of which kind they are, what technology they use, where they are, how big they are, or who owns them. I can tell you who won't be in favor of it: the incumbent monopolists, monopsonists, and oligarchs who don't like competition and new market entrants. But whether they like it or not, competition happens. It's particularly keen on the demand side.

On the relative (in)effectiveness of government:

People will vote with their wallets as well as their ballots, in a way that will affect the political system and even more the private sector, which is quite good at selling what you want and not selling what you don't buy. The interplay between business and civil society is even more important than between business and government, and that is where I want to continue to focus most of my effort. I admire those who try to reform public policy, but I don't spend much time doing that myself. In a tripolar world of business, civil society, and government, why would you want to focus on the least effective of that triad?

On the absurdity of the level of the biofuels “debate”:

You're treating biofuels as generic and I don't think that's appropriate. There are much smarter and much dumber approaches to biofuels, and biofuels do not need to have the problems you refer to.

Stay going…