ANATURAL New Industrial Revolution CAPITALISM for a New Century
VIEWPOINT by Amory Lovins
Capitalism is the productive use and reinvestment of capital, percent of power-plant fuel into light. The U.S. economy wastes yet capital comprises not only money and goods, but also at least $300 billion worth of energy every year, despite past people and nature, which are even more valuable. Without savings of about $200 billion a year. “natural capital” there is no life and therefore no economic ac- tivity. Nature provides such “ecosystem services” as nutrient Such gross shortfalls are a business opportunity. New design cycling, climatic stability, atmospheric composition, and bio- practices can make very large resource savings that cost less Clogical productivity. Estimating the correct value of ecosystem than small or no savings. For example: services will doubtless be long debated. However, we don’t ! DuPont plans in this decade to increase its revenue 6 percent need to spend decades arguing how much it’s worth before we a year without increasing its energy use (by raising its can use it as if it were valuable. energy productivity at least 6 percent a year); to get a tenth of its energy and a fourth of its raw materials from renewable To protect these essential services and to help lift the millions sources; and to cut its greenhouse gas emissions to 65 of the world’s poor out of poverty, the new imperative is to use percent below the 1990 level—all in the name of shareholder resources such as energy, water, fiber, minerals, and topsoil far value; more productively. This is not because oil and copper are be- ! Ultralight, ultralow-drag, hybrid-electric HypercarsSM coming scarce—powerful extractive technologies keep bring- (<
4 ENVIRONMENT MATTERS • 2002 ing, sustaining, and expanding natu- Redesigning the ral capital to yield more durably Business Model abundant biotic resources and ecosys- tem services. Farmers grow more food Both this biomimicry and advanced re- with higher profit and lower risk by source productivity are rewarded by imitating ecosystem behavior rather natural capitalism’s third element—a than treating soil like dirt. Major com- shift of business model from selling panies substitute native prairie grass goods to leasing a continuous flow of lawns and biological wastewater service that meets customers’ evolving treatment for chemical engineering. value needs. For example, in Europe As more firms model their production and Asia, Schindler leases vertical trans- processes on and take their feedstocks portation services instead of selling el- from natural systems, more will ben- evators. Dow leases dissolving services efit directly from such wise reinvest- instead of selling solvents, and Carrier ment in natural capital, and fewer will is starting to lease comfort services in- risk suffering the key business con- stead of selling air conditioners. This straint of this new century—nature’s aligns the interests of providers and cus- falling behind on its deliveries of eco- tomers, rewarding both for the same system services. thing—doing more and better for longer with less. Firms that downsize their unproductive tons, liters, and kilo- watt-hours can then provide more and better work for more Interface, a $1.5 billion global firm based in Atlanta, has com- people. Countries that shift taxation from jobs and income to bined the first three principles of natural capitalism and now depletion and pollution will need less tax revenue to repair the gets 27 percent of its operating profit from eliminated waste— damage to both families and nature. Indeed, by applying to a $165 million so far. Its new carpet, SoleniumTM, contains noth- whole city the same integrated design principles and entrepre- ing toxic, is certified climate neutral, doesn’t stain or mildew, neurship that natural-capitalist firms apply to their production can be washed with a garden hose, and is five times more du- processes and equipment, the Brazilian city of Curitiba has pros- rable and 35 percent less material-intensive than normal car- pered even as its population quadrupled and tides of poverty pet. Next, Interface is beginning to lease a floor covering service lapped around it. Curitiba has built one of the world’s great rather than selling carpet, so only the worn one fifth is replaced, cities—not through wealth but through design, in a brilliant not the whole area. This raises the materials savings to 97 per- process led by architects and mainly by women. cent—and soon to 99.9 percent, because Solenium is designed to be completely remanufacturable into identical products with Toward a More Sustainable Future no loss of quality. Next will come conversion to renewable Natural capitalism will subsume industrial capitalism into its feedstock’s, such as polylactic acid made from corn wastes. new paradigm much as industrial capitalism subsumed agrari- anism. This shift will take time. However, it is already acceler- Interface is doing well by doing good. The first four years of its ating as early adopters gain stunning competitive advantage. transition to natural capitalism doubled revenue, nearly As Edgar Woolard remarked when Chairman of DuPont, com- doubled employment, and tripled operating profit. Imagine panies that take such opportunities seriously will do very well. how hard it is to compete with such a firm, which uses 97-99.9 Those that don’t, he added, won’t be a problem, because they percent less raw material and 90 percent less capital to deliver ultimately won’t be around. a better service at higher margin and lower costs. In addition, this service comes as a tax-deductible operating lease to the For more information on the ideas in this article, see Amory customer. This illustrates the kind of competitive break- Lovins and Paul Hawken’s book Natural Capitalism: Creating the through—through competitive advantage—that early adopt- Next Industrial Revolution, which was published by Earthscan in 1999. See also their website <
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