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Leapfrogging Into the Future: Developing for Sustainability Arnold Int. J. Innovation and Sustainable Development, Vol. 1, Nos. 1/2, 2005 65 Leapfrogging into the future: developing for sustainability Arnold Tukker TNO, PO Box 49, 2600 JA, Delft, The Netherlands Fax: +31-15-276-3024 E-mail: [email protected] Abstract: It has become almost a platitude that radical and sustainable improvement of need-fulfillment has to be reached in one generation to prevent the possibility that Nature will break down under the combined pressure of population growth and growth in wealth per capita. This requires ‘radical’ or ‘system’ innovations. In this respect, there is an important difference between consumer economies such as Europe, the EU and Japan, emerging economies such as China and Malaysia in Asia and bottom-of-the-pyramid economies where people survive on 1–2 dollars a day: • In consumer economies, the physical economic infrastructure is already fully developed, which often causes important ‘lock-in’ problems with regard to realising radical change. • In emerging economies (which might bring about the biggest leap in environmental pressure) this infrastructure, by and large, still has to be built up, so that, in theory, there is much more freedom to design sustainable systems from the onset. • In bottom of the pyramid economies, markets are so different that copying Western market systems is factually quite difficult, although examples and innovative solutions are required anyway. But is this ‘leapfrogging’, particularly by emerging economies, while theoretically possible and practically desirable, really going to happen? Current experiences are not encouraging: ‘dinosaur’ industries such as the car industry are invited to invest heavily in countries such as China leading to a transplantation of existing problematic transport infrastructures. This paper argues that, where Western countries need a system innovation and transition management approach to realise a change to sustainability, emerging economies would have to apply something very similar to ensure that the larger flexibility they have is indeed used to leapfrog to sustainable systems. This implies that functions such as visioning, indicative planning, foresight and reflexive governance have to be fostered to ensure that foreign and national investments are used to create sustainable systems. Keywords: leapfrogging; innovation; sustainability; emerging economies; sustainable consumption and production; factor x. Reference to this paper should be made as follows: Tukker, A. (2005) ‘Leapfrogging into the future: developing for sustainability’, Int. J. Innovation and Sustainable Development, Vol. 1, Nos. 1/2, pp.65–84. Copyright © 2005 Inderscience Enterprises Ltd. 66 A. Tukker Biographical notes: Dr. Arnold Tukker manages the Sustainable Innovation Research Program within TNO Built Environment and Geosciences. TNO is the major Dutch not-for-profit research organization, with a mission to support innovation of the Dutch economy. He manages a major EU funded research network in support of UNEP’s 10 Year Framework on Programs on Sustainable Consumption and Production. 1 Introduction Many scholars state that radical innovations are needed to prevent the possibility that Nature will break down under the combined pressure of population growth and the growth in wealth per capita. In the next 50 years, the world population (P) will roughly rise with a factor 1.5 (from 6 to 9 billion people; see, for example, Lutz et al., 2004). The affluence (A) or wealth per capita in areas such as China, India and Africa still need to grow a factor 5 or more only to come close to the prosperity that Japan, Western Europe and the USA currently have. According to the so-called IPAT formula already proposed by Ehrlich and Holdren (1971) in the 1970s, this will lead to an economic growth of about a factor 10 – and hence a factor 10 more environmental impact (I), if there is no change in the efficiency of our way of production and consumption (T): Impact = Population × Affluence per capita × (Technical) efficiency of production/consumption Or, in reverse, if environmental pressure were kept at the same level as now, a Factor 10 more effective fulfillment of needs should be reached (e.g. von Weizsäcker et al., 1997; Factor 10 Club, 1997).1 Since both the population growth and the affluence per capita growth will be greatest in developing countries, it is of particular relevance that here this factor 10 should be realised. In the ideal case, developing countries should therefore, where possible, learn from the mistakes of the developed world and implement directly sustainable systems of production and consumption – a strategy that has been coined ‘leapfrogging’. Against this background, this paper will argue the following. 1 Firstly, we will discuss the final consumption domains in which radical innovations seem most needed. 2 Secondly, we will argue that innovations with such radical environmental gains cannot be realised by environmental policy approaches that search for ‘system compliant’ solutions, but that system innovations are necessary. 3 Thirdly, we will give a theoretical discussion on drivers and barriers for realising such radical, sustainable system innovations. 4 Finally, we will divide typical economies in the world in a number of classes, and discuss the challenges with regard to realising radical change in each class. In doing so, we will analyse the possibility for what we will call ‘emerging Leapfrogging into the future: developing for sustainability 67 economies’ and ‘bottom of the pyramid’ economies for leapfrogging at system level and do a suggestion for policy approaches that could be applied. 2 The need for sustainable system innovations 2.1 Relevant domains from a final consumption perspective Figure 1 gives a simplified representation of the production–consumption system (based on Inaba, 2004). Consumers have needs in different domains, such as housing, food, mobility and leisure. These needs are either covered via business to consumer (B2C) interactions, or (co-) delivered via governmental services (preceded by business to government interactions or B2G). Since these functional needs, in the end, (mainly) drive the economic production system, related material flows and emissions, we will take them as an analytical starting point.2 Figure 1 An overview of the production–consumption system (adapted from Inaba, 2004) In the past five years, a variety of studies has been carried out prioritising final consumption domains related to their life-cycle environmental impacts. These studies have mainly been for Europe, the USA and Japan. Table 1 gives the final result for a study for the EU25 for a wide variety of impact categories (Huppes et al., forthcoming; Tukker et al., 2005). The pattern visible in this table is confirmed by a large body of other work (e.g. Collins et al., 2005; Nijdam and Wilting, 2003; Weidema et al., 2005),3 and basically implies that the following consumption categories – at least in Western, developed economies – are most relevant since they induce 70% of the environmental impacts, irrespective of the type: • nutrition (food and non-alcoholic beverages plus restaurants and hotels) • transport • housing and living (furnishing, housing, water, electricity and other fuels). 68 A. Tukker Table 1 Life cycle environmental impacts (in % of the EU total) and final expenditure (in % of the EU total and 109 Euro) for 12 aggregate final consumption domains (Tukker et al., 2005)4 Leapfrogging into the future: developing for sustainability 69 2.2 The limitations of ‘system compliant’ environmental policies The above table gives a clear indication of areas or ‘systems’ where radical, sustainable innovations are most desirable. However, as current practice shows, even in countries that have an active sustainability policy, it is far from easy to realise radical gains in these consumption domains. Problems with regard to, for instance, mobility (congestion, pollution), agriculture (diseases such as BSE, mouth and foot, manure, emissions) and climate change appear to be persistent and difficult to tackle by the policy approaches that have been used in the last 10–20 years (VROM, 2001; see also Shellenberger and Nordhaus, 2004). This includes not only the largely top-down, remedial, end-of-pipe instrumentality of which the limits already became visible in the 1980s, but also ‘ecological modernisation’ approaches, that search for environmental-economic win-wins through implementing innovative technologies, use a more open and participatory policy process, and rely increasingly on new policy tools such as market-based and communicative instruments (e.g. Mol and Sonnenfeld, 2000; Young, 2000). As pointed out by among others, such as Jänicke (2000, 2004), such approaches predominantly focus on technical, ‘system compliant’ solutions related to production processes alone, and leave structural changes out of sight. This will lead not to sufficient solutions in sectors or branches that by their internal logic will inherently cause a (growing) intensive use of resources, or where adequate technological solutions do not exist. They also leave issues such as rebound effects and the almost unstoppable escalation of needs (that in turn drives material production and hence environmental impacts) out of sight (compare Jackson et al., 2004 and Shove, 2003). Or, as stated by Rotmans (2003): problems characterised by market and system failures require an innovation of the system and usually cannot be tackled by market-based or regulatory instruments
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