Natural capitalism
From Wikipedia, the free encyclopedia
Natural capitalism is a set of trends and economic reforms designed to reward energy and material efficiency, and to remove professional standards and accounting conventions that prevent such efficiencies. It emerged in the 1990s as a coherent theory of how to exploit market systems and mechanisms of neoclassical economics to save energy, discourage waste, mimic ecology (biomimicry), and in general to support the goals of environmentalism by re-framing commodity and product relations towards a strictly service economy, thereby extending the services of natural capital.
As a proper noun with capital letters, Natural Capitalism usually refers to the specific set of reforms described by Paul Hawken, Amory Lovins, and Hunter Lovins in the 1999 book Natural Capitalism: Creating the Next Industrial Revolution, published by Rocky Mountain Institute.
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As described in Natural Capitalism, traditional business models treat natural resources as unlimited and see labor as the only limit to economic growth. This is unsustainable in a world where labor is a surplus good and natural resources are pushed to scarcity. The book posits that a new economy is attainable when business interests and environmental concerns are linked. [1]
The parent organization, the Rocky Mountain Institute, provides a source for environmental business strategy innovations and news involving economical solutions to the problem of diminishing natural capital. [2] Through Natural Capitalism, Inc they offer consulting services to enable businesses to convert to environmentally conscious strategies that maximize profit. Hunter Lovins’ newest venture is Natural Capital Solutions-- the nonprofit offshoot of the project. [3] Both of these ventures work in very new fields such as military sustainability, Local Action Sustainable Economic Renewal, and sustainability leadership to name a few.
[edit] Tenets of Natural Capitalism
The basic tenets of the business model include four big shifts in policy. The first is a dramatic increase in natural resources application efficiency. They argue that with new technology, essential resources like water and forests can be used 5 to 100 times more efficiently than currently, and this will result in savings and hence more profit for businesses. The second is changing to production modes that model nature, such as closed-loop systems, in order to use resources more efficiently. The third is a shift to a “service-and-flow” economic model that encourages companies to sell a service (illumination) rather than a product (light bulbs). This can be accomplished through leasing strategies where companies provide the product and maintain it for the customer. The final tenet is a reinvestment in natural capital, which focuses on restoration and sustaining resources far out into the future. Each of the processes is linked to economic prosperity in their book, and Natural Capitalism works hard to dispel the myth that environmentally beneficial action is detrimental to productivity and profitability of a business. [4]
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[edit] External links
- Natural Capitalism - Mother Jones article on book of the same title by Paul Hawken
- NaturalCapitalism.org - Published by the Rocky Mountain Institute
- A Roadmap to Natural Capitalism - from The Harvard Business Review
- Natural Capitalism Inc. - Natural Capitalism Consultancy, founded by Hunter Lovins.
