Last week the International Energy Agency called for serious investment into alternative energy and carbon sequestering. At the same time, United States Senate blithely blocked environmental legislation with many elected officials indicating that our suffering economy could not bear such a cost. While the gulf between these two modes of thinking seems irreconcilable, a reframing of terms may go a long way toward closing the philosophical distance.
Having studied economics as an undergraduate and then worked on Wall Street for nearly a decade, I feel relatively attuned to the economy and economic thought. Having read and studied design for the last four years, however, I've begun to realize that much of what I studied and practiced (in both design and economics) was based on misunderstandings and taxonomic differences between science, economics, politics, and design.
While it is tempting to treat sustainability as a production or a materials problem, such a view neglects the realities of our global economic system. To truly do "sustainable" design, the solution must reach beyond the drawing board and into economic reality. Economists and scientists have actually already paved the way toward robust arguments for sustainable energy and design, but to understand them it is first necessary to profoundly reframe the lens through which we view the world.
Politicians and naysayers will often object to sustainable initiatives on the grounds that they limit "growth" and increase "costs." While these arguments remain difficult to refute on a commercial level, two simple observations are enough to defuse or derail even the most economically sophisticated political arguments against sustainability. Market forces cannot align with the common interest of humanity so long as prices reflect costs and benefits that occur in: (A) displaced locations and (B) periods of time other than the present. This piece of knowledge casts an "inconvenient" shadow over our current system of production, but in doing so provides hope not only for the environment but also for our economic future. Displaced Locations: The Tragedy of the Commons In the past, economic growth has been partially predicated upon population growth. As long as the number of people kept growing, manufacture and production could be expected to grow at a commensurate rate. To date our growth has been effected as a zero-sum game in which we displaced other species and used their habitats and bodies as raw materials. Individuals and corporations could pollute the environment freely and were incentivized to do so before their neighbors had the chance. This should come as no surprise to even the most conservative businesspeople, since there's already an economic term for the results: The Tragedy of the Commons.
When mankind took up only a small portion of the planet, our growth could subsist on the losses of the far larger animal population. Now, instead of displacing the habitats of others, we're beginning to disturb our own. The "commons" were so large relative to us that our abuses were barely noticeable, but now that we're over six billion strong, our damage is starting to show. We're contributing to what's being termed the anthropocene era, where human pollution is influencing the geological fate of our planet. The commons can no longer afford to be discounted; they're all we have.
The tragedy of the commons is a type of collective action problem, a social trap where all parties agree that action should be taken, but gains will not be realized unless they all act as one. While each player knows what would be best for the communal good, self-maximizing choices fail to realize the optimal outcome for all parties.
Fortunately, democratic agents can recognize the greater good and voluntarily restrict their actions for the betterment of all. To date, the tragedy of the commons has been dealt with by national governments. In the global scheme, however, bickering nations have only further displaced the problem of the commons to a larger venue. While daunting, any solution must come through collective action a global level. Organizations like the IAE and initiatives like the Millennium Development Goals are a step in the right direction, but no pan-global organization has the capacity to enforce them at the moment (sorry United Nations). With that disappointment in hand, we must search for alternative solutions to the problem of sustainability.
There's no Time like the Present: Net Energy vs. Net Entropy Another economic paradox stems from an incompatibility between what we perceive as economic growth and natural paradigms of growth. Historically, there have only been a few primary inputs to the system of life on earth: solar energy, geothermal energy and time. Excluding meteorites, no new physical matter has ever been produced. Instead, the cycle of life has been ruled by transformation and transmutation, with solar and geothermal energy as a guide. Human beings, however, seem to care little for the labors of time. Instead, we have been remarkably adroit at using energy sources from other eras (burning fossil fuels collected over millennia, eating high-trophic level foods, and chopping down old-growth forests).
Looking at the world through such a lens makes one thing clear: Despite our mansions and our roadways, our designer jeans and our iPhones, human beings have made very little. Instead we've transmuted stored energy into temporary value in exchange for long-term waste. All of the growth that our politicians seek to perpetuate is not growth at all. It burns stored solar energy to provide the illusion of growth. The amount of stored energy, real value, in the world is actually shrinking. Our process of "growth" is entropic, creating local pockets of order at a greater net cost in energy.
Fortunately, unlike the problem of the commons, sustainable energy is not a zero-sum game. While the sun's rays impart the earth with tens of thousands of terawatts of power, human consumption remains denominated in double digits. Any portion of solar power that we can claim is a permanent annuity. Admittedly the decision not to purchase hydrocarbons at artificially reduced prices does supply a competitive disadvantage for any nation who chooses to do so, but any investment in sustainable energy (taken in from the sun using either physical or biological mechanisms) yields ongoing results.
In other words, renewable energy is an investment into real growth. Rather than burning what economists refer to as stocks (our oil reserves), we would be investing in a flow (an ongoing stream of revenue, resources and value). Further, sustainable solar or wind power also tends to be local power. Through a geological accident, vast stores of hydrocarbons happen to be stored below the Middle East. The sun's rays and the winds, however, are shared across the earth. By investing in solar energy, we're investing locally rather than adding to the trade deficit. Any politician or business person who makes the claim that sustainable energy will hurt the economy is hopelessly out of date. Quite simply, we've never, ever had a growth economy. Perhaps this crisis is the time to start.
True Costs (and paying for them one way or another) Most of the problems our society is experiencing today stem from a failure to tabulate true costs of products. Indeed, barring backyard gardening and pedestrian travel, most of us have never paid the true temporal or geographic costs of a product in our lives. Now that we're feeling the pain of the oil crisis, we're realizing for the first time the true cost of energy (as priced into our means of production and transportation).
We're finally paying costs that we'd relegated to what traditional economic thought disregards as externalities (factors that aren't included in a cost calculus). Right now the sticker price in dollars of most products utterly fails to represent the environmental impact required for its production. Books like Cradle to Cradle, or the European system of prepaid disposal begin to tackle the fundamentals of external cost, but until it is done on a national or worldwide basis, our global economy won't be able to efficiently allocate resources; and that is a critical argument for any manufacturer to understand.
While we have known since the fall of the Soviet Union in 1991 that a top-down dictatorial system can't possibly allocate resources effectively, our current economic crisis is beginning to demonstrate that laissez-faire policies fail to safeguard the public good, another form of sub-optimal allocation. Although the market remains the best way to efficiently allocate individual resources, even the most die-hard capitalist will admit that problems of the commons are exceptions to the rule. Rather than a government-mandated economy or an economically-driven government, some compromise is necessary. A mechanism to include the public good in capitalist transactions must be found. For now, pigovian taxes, cap-and-trade policies and carbon taxes are the best tools we have for the government to implement protective policies without short-circuiting market forces.
While it's really easy for designers to get preoccupied with specifics and technologies, if the true costs of production are not included in immediate prices, people will continue to purchase seemingly inexpensive products that harbor large and hidden environmental costs. So as long as some providers embed their cost of production into the environment instead of the price tag, ethical manufacturers will be penalized for charging ethical prices, and the mass adoption required for manufacturing efficiency will be tragically delayed. Economic forces are excellent at distributing funding to ensure that the right initiatives get the right R&D, but until prices reflect real environmental and long-term costs, consumer expenditures will not be effectively allocated according to our needs.
When we imagine wealth, it's easy to get caught up in the idea of material possessions. Predictably, in a system with no inputs (which is largely the way we treat the world now), competition will center on matter. In a system with solar inputs, however, matter remains important to stockpile, but efficiency in storing energy creates an ongoing reward. Since matter is finite and can only be squabbled over rather than created, long-lasting gains cannot be found there. Instead, leveraging, using and storing solar energy would be the only way to create lasting gains. By harnessing external solar inputs, the net wealth (net energy) of the system could grow in a way that has been forgotten since the Precambrian.
Toward a New "Gold Standard" I'm a die-hard capitalist, and yet I'm beginning to realize that market forces no longer protect the common good. Those protections are left for democratic consensus instead. For that to happen the public must be educated, and controls must be put in place to safeguard its commons. Designers have long served as the interface between corporations, scientists and the public. Now that the public and private spheres have intersected on environmental issues, all of us (designers included) must be the mouthpiece for the will of the public, educating and demonstrating how capital should be allocated.
Fortunately, when our government speaks of growth, that growth does not need to be zero-sum. Growth can come not only from increases in production and population, but also from increases in efficiency, and we see technology growing at exponential levels that would have made Malthus or Moore proud. Now that the Internet and the global information economy have rightly taken center stage for humanity's most promising achievement to date (can you even remember life pre-Wiki?), the synergies and non-zero-sum games that come from human cooperation are poised to take us toward a technological singularity promising exponential growth.
Governments (and most particularly our own) can serve their interests, along with that of the corporations and their people by enacting price controls, taxes and/or cap-and-trade policies on hydrocarbon energy. If this can be done with a national or international consensus, as variously proposed by organizations like the IAE, thinkers like Jeffrey Sachs, commentators like Thomas Friedman, and even industry tycoons like Jim Rogers propose, it would benefit us all in the long term by evenly distributing the short-term costs and leaving no loss of competitive advantage. This remains the only path for the maintenance of the commons, but any one country choosing to convert to sustainable energy, even acting unilaterally, could also set itself up for real long-term growth.
If we begin to tax hydrocarbons to better reflect the damage they cause to the commons, the government would immediately receive funds that it could invest into renewable energy for our future. More importantly, such a tax would make sustainable energy appear cheaper relative to oil. Because mass production operates on economies of scale, every dollar spent on sustainable energy rather than oil is effectively a vote to invest in R&D as well. Consequently, a carbon tax not only provides funding for public research, but also indirectly pushes the private sector towards sustainable development. America, in particular, will be hobbled by rising energy prices because of the vast and extensive roadways that separate our population, manufacturing and agricultural centers. Perhaps more than any other country, we would benefit from renewable energy; once we provide incentives to overcome the externalities, our extensive technological and capital infrastructure will pave the path sooner than the pundits imagined.
Government sponsored sustainable energy initiatives are not expensive travesties. They are instead the new gold standard--a mechanism reflective of the solar energy absorbed and retained by the earth in real time. Rather than basing our economy on precious metals or petroleum locked within the earth, economic productivity should be measured in sustainably produced BTUs or calories, which are the only measures of real and lasting value our planet has ever known.
While some may discount such thinking as naive, I retort that the alternative is tragic, and the world cannot afford to be anything but utopian at this juncture. We, as human beings, are gifted with foresight. Now is the time to use it. A growing scientific consensus is demonstrating that tragedy looms, and an enlightened minority offers ways around it. It is time to let our higher processes overcome our baser nature. This can only be accomplished by entreating our governments to enact global regulation along the lines the International Energy Agency proposes. We are the polis, we are the people, and we need to let our wills be known.
That is the world I'd like to give to my children's children, but for some reason that paradise seems so far away. It isn't as long or hard a journey as one might think. Anyone who tells you it's not worth the trip is acting in their own self-interest and at great cost to the rest of us. Those voices must be corrected, or collectively shouted out. Let's silence the free riders, lend our voices to the politicians and all take a walk toward that future together. It's closer than you might think.
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Robert is an NYC based industrial designer with an emphasis on industry. The work he's doing in fluid dynamics might someday translate into improved water filtration and desalination systems, but he realizes that without price intervention it might never be economically feasible. He's happy to say that he has not yet littered the landscape with injection molded plastic knick-knacks, but freely admits that he still isn't immune to lusting for useless baubles. Finally, he'd like to tell the readership that he's more a scientist than a proselytizer and he really isn't into this whole "call to action" thing, but is beginning to realize that the crisis is getting so urgent that every added voice helps. Photo image by Wendy Moody
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