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Blue Economy: Economic Paradigm for a Sustainable Future

Blue Economy: Economic Paradigm for a Sustainable Future

Today we are leading a life which our planet can only sustain for a limited amount of time. 
1336563558 Blue Economy: Economic Paradigm for a Sustainable Future We Blue

Today we are leading a life which our planet can only sustain for a limited amount of time. Yet more than half of the people living on our planet cannot even fulfil their basic needs and must have a right to growth. Our society’s future and economy’s sustainability are only conceivable if we learn to create more livelihood for an increasing number of people using less natural resources. For twenty years now, realisation is growing that the greatest physical threat to ecological subsistence is the huge and unnecessary waste of natural resources.  Roughly 30kg of nature are used on average to create 1kg of technology, not including water. Without this technology, modern services cannot be delivered. More than 90% of de-naturalised environment used to create material wealth does not make a contribution towards fulfilling human needs and dreams.

When the heads of governments and nations meet in Brazil in June this year to discuss about a globally sustainable development, the question about defining a sustainable economy will also come up. It has taken a long time before governments have agreed about basic guidelines of the term “Green Economy”. For more than a decade, the “green movement” has been shaped without a unifying political image, leading to the present, multifaceted term of the Green Economy. Some prefer to call it “greenwashing”. Slowly a political consensus has been found that the Green Economy’s aim is a “naturally supportable economy of low emissions”. Of course a constituting policy of regulation is necessary to follow this path, which supports businesses orientated towards innovation and reduces emissions of pollutants into the environment. In spite of all the progress which has been reached concerning this subject, we know that the Green Economy is only a step of transformation towards a change of paradigms in the social and economic development.

We call this new paradigm Blue Economy. Sustainable business in the spirit of the Blue Economy makes it possible to respond to the basic needs of all without exploiting the natural resources, but also without a need to renounce to commodities. In contrast to the Green Economy, the Blue Economy stands for a new way of designing businesses, a new market-oriented business model, sustainable businesses and sustainable growth. Blue Economy stands for making the good more accessible and the bad more expensive. Blue Economy stands for clean water, clean air and for Planet Earth.

The term Blue Economy means: Using available resources in cascading systems, the waste of one product becomes the raw material for a new cash flow. In this way jobs are created, social capital is built and the income increases – without further exploiting and damaging the environment, but rather conserving and improving it. This makes sustainable growth possible. The present global economic system can be transformed into a sustainable development by innovations and entrepreneurship. Innovations and better livelihoods are promoted by demand, by means of the free market and by education instead of inhibiting them with subsidies and social barriers.

The key is a holistic view of things, it is about intelligent synergies and connections of different levels (cascades) within (eco)systems which might not be visible at first sight. ZERI Foundation, founded by Gunter Pauli in 1995 in preparation of the Kyoto protocols, has been identifying and scouting examples of such new business models for many years, promoting them under the term Blue Economy. Now we need to search for dialogue in order to promote a holistic understanding of an interrelated world of production, integrating the basic resource of water as a pillar for plants, animals, algae and bacteria.

Growth and the Value of Nature 

The ecological currency to create sustainable wealth  is a maximum of achievable resource productivity.  Material growth is the opposite. Today, anyone can extract resources from nature and use them profitably without paying an appropriate price. Today, humans use enormous amounts of energy to move more than 100 billion tons of material every year, not counting water and tilled land. This is more than double what nature can achieve. Therefore, the amount of resources utilized for welfare is an indicator that can be used to measure the potential environmental damage of all goods and services – the so-called material footprint. Ecologically, we hope to speed up processes which decrease the use of natural resources.

We could achieve this fairly quickly without decreasing our livelihoods and welfare. As far back as 2004, economists published that SMEs in Germany could save on average 20% of their cost for resources without decreasing the quality of output – i.e. more than 150 billion EUR p.a. . In other words, saving natural resources is worthwhile – but few companies have understood the benefits of increasing resource efficiency. It seems politics must set an incentive (for a limited period of time). It is scientifically impossible to measure the eco-toxic effects of economy in all necessary detail, never mind make accurate predictions, to be able to use such measures in environmental politics. As all indicators, resource productivity and intensity can only be an approximate indication of the potential environmental burden. Thus, prohibitions are of little use.

Instead, the price for extraction and use of nature must be adapted to the real cost. One possibility would be to shift the financial burden on labour to natural resources (macro-economically cost-neutral). This would seem appropriate since natural capital has increasingly become the decisive shortage for humanity, not labour. Only when the input of natural resources into the economic metabolism is at full-cost-pricing will innovations increasing resource efficiency take off. And the only environmental labelling needed would be the toxicity of products.

New Business Models

But we need to do more than save, i.e. increase efficiency. Equally important is the effectiveness, finding the best possible use for resources – thus creating far more value from the available resources. Today’s business model is focussed on material growth, economies of scale, core business and core competence and favours specialisation and concentration on select markets. Success in business is measured in cash and market share and not in the ability to create sustainable, lasting utility for consumers.

It appears we urgently need a new kind of business model to support a future-proof economy. One central prerequisite is to fulfil the basic needs of all for e.g. food, services and resources as locally as possible and self-responsibly – only then can Happiness be achieved. One example of how to increase value creation hundredfold based on modern habits:

From the bean to the cup of coffee, only 0.2% of the plant are actually consumed. In other words, 99.8% must be disposed of – 7.5 million tons of coffee grounds are at best burned or composted, or end up in landfills. Instead, this hard wood could be used to cultivate gourmet mushrooms; after their harvest, worms eat the leftovers, which results in fish feed and high-quality fertilizer. No waste remains, instead three new products and thus cash flows including jobs have been created. Companies in Berlin, San Francisco, Mexico City and Madrid are already using this model – while coffee corporates make zero use of the efficiency, resource and income potential, instead spending money on expensive ‘greenwashing’.

Business models published as ‘Blue Economy’ demonstrate that nature is the most efficient AND effective economist of our planet. All problems have multiple solutions which produce neither waste nor unintended collateral damage. Many highly toxic components of our products which cause large material footprints in their own production could simply be substituted by “nothing” – such as batteries can be replaced by natural electricity from temperature differentials. Orienting product design on natural physical principles opens an inconceivable potential, e.g. when water is cleaned using gravity as a sole source of energy (eliminating chlorine and expensive filters).

The result are products which are cheaper and better – better for all of us including nature. We hope that politics, business and consumers will realise that it is possible to live a sustainable ‘future’ today. All we need is a shift in mindset, not a relinquishing of wealth and need satisfaction.

A politics of local growth and sufficiency

To realise the potential already possible and known today, politics must set the scene. An elaborate program for innovation and value creation towards resource effectiveness should include:

– Preventive enforcement of systemic solutions [EU 6.1]

– Targeted improvement of resource productivity [EU 1., 6.1]

– Enforcement of real prices on the market (“full-cost-pricing“) [EU 3.4.2]

– Effective collateral damage responsibility in politics and business (Homburg)

– Agreement on ecological, social and economic goals for a stable future [EU 6.1]

– Definition of environmental indicators for all political areas [EU 1., 2. 6.1]

– Abolishment of consumption promoting subsidies [EU 3.4.1.]

– Limitation of short-term profit maximisation

– Prevention of “toxic products” (Stiglitz), [EU 3.1.2.]

– Provision of early warning systems,

-Establishment of dependable standards in accounting, reporting and labelling [EU 4.1].

We hope Rio+20 can achieve some significant steps in this direction, as time is running out. In July 2010, a study of the German military concluded that “there is a very serious risk that a transformation phase of economic and societal structures caused by long-term scarcity of important resources will not pass off without frictions at safety political levels. The disintegration of complex economic systems … has direct, profound consequences for many areas of life, especially in industrialized countries. … The foreseeable change in paradigms is contrary to economic logic and can therefore not be left to market forces alone” .

Without the eco-systemic services and functions that humans evolved from, human kind cannot survive on planet Earth. We all have to act immediately to protect our right to a future, but also the rights of the future: a right to life of happiness and well-being in harmony with nature.

 

ZERI Germany e.V. (Zero Emissions Research & Initiatives)

Markus Haastert, Executive Chairman

 

Blue Economy Institute

Anne-Kathrin Kuhlemann, Head

 

To download this article as pdf, please click here.

Happiness as indicator of new economic paradigm

Happiness as indicator of new economic paradigm

Bhutan invites Blue Economy to help design the economic concept 
1333636251 Happiness as indicator of new economic paradigm We Blue

Jeffrey Sachs (links) , Anne Kathrin Kuhlemann, Enrico Gionvannini

UNO Conference discusses about Happiness as indicator of new economic paradigm

Bhutan invites Blue Economy to help design the economic concept

On April 2, 2012 a conference was held in the premises of the United Nations in New York titled “Happiness and Wellbeing: Defining a new Economic Paradigm“. More than 600 participants from all over the world followed Bhutan’s invitation, among them scientists, politicians and civil society. All of them were welcomed by Ban Ki-moon, Secretary General of the United Nations.

Nobel laureate Prof. Joseph Stiglitz said: “GDP has failed to capture the factors that make a difference in people’s lives and contribute to their happiness (security, leisure, income distribution and a clean environment.“ Prof. Jeffrey Sachs, economic advisor of the Secretary General of the United Nations and author of the Millennium Development Goals, presented his new “World Happiness Report“: (http://www.earth.columbia.edu/sitefiles/file/Sachs%20Writing/2012/World%20Happiness%20Report.pdf). Sachs claims that happiness cannot be achieved by economic welfare alone as measured by Gross Domestic Product. 

Jigmy Y. Thinley, Prime Minister of Bhutan, pointed out that the GDP-lead development model that compels boundless growth on a planet with limited resources no longer makes economic sense.” Urged by Bhutan, the UN General Assembly passed Resolution 65/309 already in July 2011, which supports a holistic approach to development so nations can achieve higher levels of happiness and wellbeing among their people.

Representatives of the Blue Economy were asked to elaborate the economic mechanisms of this new paradigm in cooperation with other experts. Anne-Kathrin Kuhlemann reminded participants to consider resource efficiency and resource effectiveness as a basis for new business models: “Innovative, prosperous technologies have to be both supported as well as required in order to encourage the business world to adopt this new paradigm.”

As representative of ZERI, Markus Haastert highlighted the importance of education: “The next generation has to master systemic thinking. People that understand how the world is interconnected will act in a responsible way and design future business models in a completely new manner.”

The conference was assisted by high-ranking representatives of the UN, politicians like the president of Costa Rica, Laura Chinchilla, as well as numerous delegates from Brazil, Morocco, Finland, Australia, Thailand, Japan and other countries – a total of 68 nations have signalled to Bhutan that they support this initiative.

As a result of the conference, a report will be issued to the Secretary General of the United Nations. The proposals will also be part of the Rio+20 process in June this year and are supposed to lead to concrete mechanisms which will replace the Millennium Development Goals from 2015 on.