Rocky Mountain Institute/ volume xvi #2/fall/winter 2000 RMISolutions newsletter CALIFORNIA’S ELECTRICITY SUPPLYMYTHS by Thomas Feiler

T’S RARE WHEN DISCUSSIONS OF A Once heralded as the nation’s leader in commodity dominate dinner-party restructuring its electric utilities and cre- chat, but that was the case on many ating competitive markets for electricity, I California is rethinking the wisdom of its California patios this summer. And everyone seems to have an opinion about actions. And the rest of the country is why the lights went out in San Francisco watching. All 49 other states and the fed- for several hours one day in June, why res- eral government are considering restruc- idents in San Diego saw their summer turing the electricity industry in their electric bills double, and why dire public jurisdictions. They can learn from warnings to reduce electricity use or risk California’s mistakes—or repeat them.5 blackouts have become commonplace When it comes to essentials like electricity, throughout the Golden State. the public is of two minds about markets and competition. Enthusiasm is strong CONTENTS when markets deliver lower costs or A wind farm in THE IMPACT OF GLOBALIZATION ... page 4 continued on next page southern California: NAT CAP IN CLEVELAND ...... page 6 the electricity supply is in- DESCARTES MEETS DARWIN .... page 7 creasing, just not in the way DEAR ROCKY ...... page 9 most people expect. AUSTRALIA’S CLIMATE CHALLENGE . page 10

CHINA:OVERCOMING COAL..... page 12

THAT’S LEADERSHIP ...... page 14

HOT SEAT...... page 16

RMI NEWS ...... page 18

LIFEAT RMI ...... page 21

THANKYOU,DONORS ...... page 27

STRATEGIC INFLUENCE IN CANADA . page 31 photo: Norm Clasen continued from maintenance and repair continued to political objectives. As a result, the type of previous page operate throughout the summer, proving competition that the new market has deliv- greater value, but ebbs quickly when mar- that the electricity supply infrastructure is ered is imperfect and immature in some kets produce pain. in fine shape. very important This past summer’s market volatility However, the entire electrical system—the ways that energy offered a vivid reminder of the funda- grid—is vulnerable. Four summers ago, a cannot be mental dependence of the economy and series of technical and human failures on a explained by society on reliable electric power. For a hot August day knocked out power to either classical economics or conspiracy growing number of high-tech companies, about 7.5 million customers in eight theories. Most notably, the architects of the cost of even tiny outages can be spec- western states and British Columbia. That the market focused almost entirely on the tacularly high. Increasing demand for reli- disruption, the second worst ever experi- supply side of the business (and the polit- able power has heightened political enced in the United States and the worst ical deals necessary to get the buy-in of the reactions and the search for quick fixes. In to hit this region, can be traced to the three large California utilities) but neg- inherent instability of lected, and in some cases obstructed, the a system that is ability of consumers to obtain energy serv- designed around a ices in more rational and cost-effective California’s power problems small number of ways. large, centrally con- In this half-baked competitive environ- are not the direct result of trolled facilities. ment, the wholesale power markets are competitive markets, but Simple and cost- behaving rationally, although quite errati- effective ways to cally, to supply and demand signals. San rather of a lack of robust increase the relia- Diegans’ electricity bills doubled because bility, resilience, San Diego Gas & Electric executives gam- competition. and stability of the bled in the marketplace and lost. Rather system, such as than secure supplies in advance to meet using small-scale, their customers’ summer needs, they gam- distributed generation technologies and bled that they could buy cheap electricity one of the bigger ironies of the electric end-use efficiency, are well known within in the spot market, and that rising summer industry restructuring debate, former free- the industry, but have not been pursued demand wouldn’t drive prices up. Both market proponents are proposing increased with any discipline or enthusiasm by the bets were terribly wrong, and now their government regulation, mandatory mem- traditional utilities. The utilities are used to customers are left holding the bag. bership in industry organizations, central- doing business the old way, delivering elec- The good news is that because of restruc- ized governance of grid operations, and tricity created by central power plants—a turing, Californians can now choose from a government price controls. system that is easily controlled and monop- rapidly growing number of alternative elec- In thinking about appropriate responses, it olized, but vulnerable to large-scale disrup- tricity suppliers (with several offering envi- is helpful to look past five troubling myths tion. ronmentally friendly renewable electricity) now circulating about the cause of the that might take a more measured and cau- recent problems and the role of competi- tious approach to purchasing electricity for Myth #2: Competitive tion in the electric power industry. their customers. Consumers were initially power markets are to slow to realize they could switch elec- blame tricity companies, but a growing number of Myth #1: The electricity California’s power problems are not the San Diegans are now voting with their supply system is failing direct result of competitive markets, but feet. Such signals should motivate utilities California’s power supply crisis has come rather of a lack of robust competition in to improve their practices. even though none of the state’s power the markets. The structure of the new plants or transmission lines has failed. In power markets, after all, was designed to fact, many parts of the system that were serve not only economic efficiency but also supposed to be taken off-line for regular continued on page 22

page 2 S THIS ISSUE OF RMI SOLUTIONS in which readers are EDITOR’S NOTE came together, it took on a geo- invited to pose ques- Agraphic perspective. tions to RMI about You’ll find insight into the causes of Cali- the contents of the newsletter. by Brent Gardner-Smith fornia’s spike in electricity prices, why We’ve created a guest column slot, called China’s consumption of coal is down, how “Other Voices,” to showcase complemen- the fight to limit greenhouse gases in Aus- tary ideas and insights from colleagues out- Finally, “Board tralia is going, why the Canadian finance side RMI. We found the inaugural column Spotlight” intro- minister sounds more like an environment by Harlan Cleveland to be a thought-pro- duces the vital, minister, and what manufacturers in voking piece on how the world is interesting, and Cleveland are doing to put into practice changing, and will continue to change. exceptional people who serve on the principles of Natural Capitalism. Making a return appearance in this issue is RMI’s Board of RMI staffers fanned out across the globe “Dear Rocky,” a feature where we share a Directors. The first this year to work on different projects, and few of the hundreds of questions posed to spotlight is shining on Christine Loh, who it spurred our reporting on topics as our outreach specialists each year. has made waves as a member of Hong diverse as the green Olympic village in Answering these questions is a big part of Kong’s legislature and now as a citizen Sydney and why Taiwan shouldn’t com- RMI’s mission, and we devote a consider- activist trying to improve the city’s envi- plete its fourth nuclear power plant. able amount of our time and energy to ronment. Also in this edition, you’ll find some new being a clearinghouse of information for I hope you enjoy this issue. features. We’ve added “Hot Seat,” a forum people trying to make a difference.

Don’t Drop Off Our List— If you are already a donor of $20 or more, Donate and Keep you don’t need to do anything except sit back and enjoy the newsletter. (Thank you RMISolutions Coming! for your support!) If you are not currently a supporter of RMI, but enjoy reading the newsletter, colleagues, and developed more features— either in print or online at www.rmi.org, by Dale Levy, including a reader feedback section. We we encourage you to send a donation of at Development think the newsletter is significantly better least $20. This will ensure that you con- Solutions Director than it was last year. tinue receiving three times a We’ve also looked at the size of our year. Please use the enclosed envelope to mailing list, which through the years has send your contribution. grown to include 20,000 names. If you can’t afford a minimum contribu- As we made changes to the newsletter and tion, please let us know of your unique sit- AS RMI’S NEW DEVELOPMENT DIRECTOR, reflected on the costs of production, paper, uation and we will send you the I’ve challenged almost every assumption and postage, we began wondering: how newsletter as a gift. about fund-raising here. As you can many people on this list are still interested We are working hard to make Solutions a imagine, this has led to many interesting in receiving this newsletter and are current source of news and insight on the issues and stimulating conversations! RMI supporters? on which RMI focuses. And we think it is Of course, vibrant debate is not Well, this question led to another of those an excellent way to stay connected with uncommon at RMI, especially when lively discussions. In the end, we decided what is happening at RMI. We hope you working on something as important to the that beginning with the next issue, agree. Institute as our newsletter. Solutions will be sent only to those who Your participation and ongoing feedback We’ve recently redesigned Solutions, make a $20 or greater donation to RMI on are valued, so please don’t hesitate to drop added columns from RMI staff and outside an annual basis. us a line and tell us how we’re doing.

page 3 Fall/Winter 2000 NATURAL will demand greater democracy and ulti- CAPITALISM mately greater protection for the environ- ment. The World Bank, the International Monetary Fund, and (much more recently) the World Trade Organization were founded to advance this agenda. The pro- testers may not like it, but nearly every country in the world is a WTO member, and none has resigned. Even China now seeks membership. Opponents of globalization include people the and organizations with very diverse con- cerns, cultures, and goals. They tend to IMPACT agree, however, that the benefits claimed for globalization are illusory, or accrue only of globalization to elites. The WTO, whose meeting in Seattle the protesters disrupted, is seen as threatening hard-won treaties and local laws that protect the environment and human rights. The existing trade regime, opponents say, is worsening the disparities of wealth between haves and have-nots in the global economy. They challenge not only the by L. Hunter Lovins multilateral institutions but also the very merits of free trade, calling for a relocaliza- tion of finance and of decision-making. changes are affecting not only Wall Street any people watched the Preferring local and national self-determi- and Main Street, but even rural villages in recent protests against nation, some demand the outright elimina- the developing world. Mglobalization in Prague, tion of the WTO and a rolling back of Melbourne, Washington, and Seattle, and WHAT’S THE FIGHT globalization. wondered what all the fuss was about. ABOUT? Some critics also decry, with farmer/poet Few would dispute that globalization has Advocates of globalization argue that trade Wendell Berry, the homogenization and become a source of dissension, but fewer must be the preeminent objective of inter- commoditization of all goods, so that their can describe the issues, and fewer still national agreements, and that other con- story is lost and customers can’t make know what to do about them. Once an cerns are legitimate only to the extent that responsible decisions about whether to buy academic topic for policy analysts, global- they don’t inhibit the free movement of them. The meat in Swiss village butcher- ization is now inciting demonstrations on a goods and financial capital. This view shops is labeled with the name of the farm scale unseen since the Vietnam War. holds that free trade will expand economic it came from, so good farmers can be Part of the problem is that the world as we opportunities and “lift all boats.” Oppo- rewarded and bad ones penalized in the know it is changing rapidly, and increas- nents, they argue, are protectionists or ingly no one is in charge. The fall of the Marxists. Berlin Wall and the apparent triumph of Nations that trade, advocates claim, will capitalism worldwide, and the spread of not go to war with each other. Globaliza- Join discussions on globalization and communications and information tech- tion will spread the Western liberal values Natural Capitalism at www.rmi.org nology bringing the ability to move capital of democracy and human rights, and and www.naturalcapitalism.org. around the world at the stroke of a com- unleash competition that favors excellence. puter key, have fundamentally changed the Trade will empower a middle class that way the world works. Increasingly such page 4 local marketplace, but this is lost when planted by it, their sovereignty under culture, are therefore not enhanced by the meat becomes anonymous on a super- attack. The protesters decrying globaliza- physical mobility of trade, and may be market shelf. Wrapped in this concern are tion are able to gather and organize only harmed by it. profound questions about social fabric, because of the technologies (and in no However, as our book Natural Capitalism appropriate scale, and human purpose. small measure the social sense of global describes, companies can begin to behave The WTO has critics within itself, with interconnectedness) that enable it. The in ways that enable them to profit and out- developing countries claiming that the rich corporations that the protesters accuse of compete their rivals even as they reduce have set the rules to their unfair advan- being both the drivers of globalization and their resource use, eliminate waste, and tage. Many observers of the Seattle its primary beneficiaries are themselves at restore natural capital. This means that it is meeting predicted that a stalemate would risk from it: 40 percent of the Fortune 500 now strongly in the economic interest of have occurred even if no protestors had firms listed in 1985 no longer exist. corporations to begin behaving in ways shown up. They point out that WTO The debate over globalization seems that protect the environment. Over the member nations do not even accede to the intractable. However, three aspects of past decade, many farsighted companies organization’s rulings. The protests in RMI’s work in Seattle—and the resistance to WTO deci- Natural Capitalism sions that compromise member countries’ and Economic standards of health, safety, and the envi- Renewal can Like GNP statistics and most ronment—are evidence that the WTO is enlarge the terms of ways of accounting for economic failing in its role as a negotiating forum. Its the debate, and may legitimacy is compromised by decisions make it less thorny. activity, the ideology of global- that coerce member countries into relaxing AN INADE- their domestic standards to a lowest ization ignores the value of QUATE IDE- common denominator. OLOGY human and natural capital. SO WHAT’S TO BE DONE? Much of the failure The changes that the protesters are of the multilateral demanding would have significant conse- organizations to have already discovered remarkable oppor- quences, but may not be achievable. It’s gain acceptance and resolve disputes stems tunities through adopting the principles of not clear that anyone, even national gov- from the fact that their underlying ideology Natural Capitalism (see page 6). This has ernments, could slow globalization if they is incomplete. profound but previously ignored conse- wanted to. Of the world’s 100 largest eco- Like GNP statistics and most ways of quences for the debate over globalization. nomic entities, more than half are no accounting for economic activity, the ide- Together, the four principles of Natural longer countries but companies. While ology of globalization ignores the value of Capitalism form a business strategy that is many rightly criticize the effects of this human and natural capital. It assumes that both essential and profitable. The compa- trend, it is folly to deny that financial cap- increasing trade in the two forms of capital nies that are furthest down the road in ital is now instantly transferable around that are mobile—manufactured and finan- adopting it are finding not only astonishing the globe, or that communications tech- cial capital—will, by itself, increase human competitive advantage and profitability, but nology and the Internet have forever wellbeing. That might be true if the sole also ways to eliminate (not just reduce) changed the way business is done and basis for prosperity were the exchange of waste and pollution. They can often decisions are made. It is even questionable those two forms of capital. But ignoring employ more people, and improve innova- whether the nation-state as such will the critical role of the other two forms of tion and morale. endure in a world in which the market is capital and engines of wealth creation, and Such companies are taking a leading role breaking down political and economic bor- behaving as if human and natural capital in addressing some of society’s most pro- ders. had no value, will result only in the found economic and social problems. They Ironies abound in this situation. The gov- increased impoverishment of almost may not think of themselves as environ- ernments encouraging globalization are everyone. These forms of capital are place- mentalists, only as profit-maximizers. Yet themselves being weakened if not sup- based, being rooted in an environment or a continued on page 24

page 5 Fall/Winter 2000 TRUE TALES OF NATURAL CAPITALISM

by Holly Harlan

OME BUSINESSES WORRY THAT duce a product and all the outputs created take on overwhelming proportions. implementing Natural by the process, including waste (which we Dramatic gains toward running an opera- Capitalism will require too prefer to call “unsaleable production”). tion with greater resource efficiency can be S made by taking simple and direct actions. much time and staff energy. However, two After conducting such an analysis this past Cleveland, Ohio manufacturers have found summer, Pete Accorti, co-owner of Talan What’s more, the cost savings that are usu- that even small steps can lead to higher Products, a Cleveland-based stamping com- ally a byproduct of this more efficient resource productivity and greater prof- pany with 45 employees and over $9 mil- approach can help companies implement itability. lion in sales, decided to start by looking at the fourth principle of Natural Capitalism—reinvesting in natural capital, Mike Wochna, president of Melin Tool, a a primary input—energy. which is the basis of future prosperity yet family-owned machine shop with 50 Talan was spending about $12,000 a is in increasingly short supply. employees, began by eliminating solvents month on electricity, but the company had from his processes—an application of the not seriously tried to control this cost; its second principle of Natural Capitalism, focus had been on labor productivity and Holly Harlan is the manufacturing assis- which aims to close materials loops and sales growth. tance program leader at the Westside eliminate waste and toxicity. The first thing Accorti did was create an Industrial Retention and Expansion The solvents the company was using had energy management committee. The com- Network (www.wire-net.org) in special handling and disposal needs, and mittee contacted Talan’s main vendors, Cleveland. WIRE-Net’s mission is to presented air-quality issues on the shop starting with the company that provided retain, grow, and attract industrial and floor. Wochna collaborated with Better and serviced the air compressors used in related employers and to engage them Engineering Manufacturing of Baltimore to the manufacturing process. as stakeholders in the community. develop a water-based cleaning system that “We discovered that it was costing our was strong enough to clean off oil residue company $6,000 a month—half of our without a chemical solvent. electricity bill—just to run two compres- THE FOUR The new system, which cost $35,000, not sors,” Accorti said. PRINCIPLES only eliminated the use of solvents, it also Now Talan is working with the compressor doubled capacity, reduced labor costs, vendor to do a seven-day analysis of air OF NATURAL improved air quality, and reduced noise. usage and peak demand. Based on the out- CAPITALISM “I didn’t make this investment based on come, the company expects to install one Natural Capitalism is a new business cost savings,” Wochna said. “I wanted to high-efficiency compressor instead of two model that involves four interrelated improve the air quality in my shop. How- older ones. shifts in business practices: ever, because the new cleaning system The vendor took the older compressors ■ Radically increase the runs unattended, I found that I save back and credited them against the lease of productivity of natural $55,000 a year in labor costs and could the new compressor. Net savings are resources move a worker to an opening in another expected to be $3,000 per month. Talan ■ part of the operation.” may also contract with an air-services Shift to biologically A resource-flow analysis of a product, supply company to eliminate buying or inspired production process, or company can help both to elim- leasing compressors altogether. This is an models inate waste (principle two) and to increase example of principle three, which entails ■ Move to a solutions- resource productivity (principle one). The shifting from selling (or buying) products to based business model analysis can be a simple input/output dia- leasing services. ■ Reinvest in natural gram or a more in-depth lifecycle analysis What these examples show is that putting capital that considers all the inputs needed to pro- Natural Capitalism into practice need not page 6 PERSPECTIVES

N SCARCELY MORE THAN A HALF-CEN- genes, but is not really about genetics TURY, our species has developed at (which is a finely tuned evolutionary Ileast four technologies that pose a process for selecting and transmitting danger to its own future. heritable information so as to improve The first, nuclear fission, retains the poten- biological fitness). “Engineering” tial to annihilate humanity. Cold War implies an understanding of how terror is now history, but in its place have causal mechanisms translate action come other dangers. Fifty-five years after into effect, but we are far from under- Hiroshima and Nagasaki, few people standing how genetic patterns turn remember what it means to kindle a small into organisms. star over a city. Vigilance has relaxed, But we are well along in changing while bomb-making technology and know- those patterns anyhow—and thereby how has spread widely in simplified forms. transforming science from a way of The missing ingredient—fissionable mate- understanding how nature works into rial—is falling into numerous and irrespon- a tool for changing what nature is. sible hands. Saddam Hussein nearly made Biotechnology not only speeds up bombs and is still trying; if he doesn’t suc- genetic changes by about a billionfold—far by Amory B. Lovins with ceed, someone else will, or will simply buy too fast to ensure safety before release— L. Hunter Lovins military bombs gone astray. but also changes their goal from evolu- Having worked for decades on nuclear tionary success to economic profit. This nonproliferation, I wouldn’t be surprised to industrialization of life, fundamentally question the belief that biodiversity is so wake up tomorrow morning and discover changing the nature of the 3.8-billion-year- inadequate that we must create novel life forms, unneeded for nutrition and unwel- come in the marketplace, to correct God’s WHAT’S POSSIBLE lamentable oversights. And like nuclear power, biotechnology can MAYNOTBE be abused. High-school kids can buy gene- splicing kits for basement experiments with recombinant DNA, and find it not WISE unduly difficult to splice deadly toxins into common bacteria. Amateurs have already that nuclear terrorism, or even nuclear old life process, is carried out by people been caught doing so. Some countries (and war, was under way. There have been skilled in gene-splicing technique and bio- perhaps non-national terrorist groups) near-misses. chemistry, but generally ignorant of key employ teams of amoral but skilled scien- Once made, bomb materials last nearly for- biological fundamentals—ecology and evo- tists to create dreadful new plagues. That’s ever. Human institutions and attention lutionary biology. It’s very clever kids with so much easier, cheaper, and more conceal- don’t. Will we go on being lucky—nearly PhDs in “molecular biology,” playing with able than developing nuclear bombs. It will forever? dangerous stuff they don’t understand. be a pleasant surprise if no designer epi- Some theologians suggest—not from igno- demics are unleashed on the world, acci- DESCARTES MEETS rance or superstition but out of deep bio- dentally or deliberately. DARWIN logical wisdom—that it was not through Genetic manipulation, far from being the Then there’s the manipulation of genes. mere carelessness that the Creator failed to pinnacle of industrial modernity, is actually The euphemism “genetic engineering” is put genes from an arctic fish into a straw- the last gasp of industrial primitivism, inaccurate. Genetic manipulation moves berry to boost its cold tolerance. They continued on next page

page 7 continued from scale—offers the promise of “desktop man- the worse not only what we can do but previous page ufacturing” that could assemble anything, also who we are. A robotic device that can applying a reductionist and mechanistic one atom at a time, very cheaply, with no design and build another robotic device mindset to living systems that don’t work waste. Yet, as Joy points out, nanotech can has already been demonstrated. In the fast- that way. It’s the biggest intellectual colli- exhibit the same amoral, scientific hubris forward world of Moore’s Law and sion since the Reformation: Descartes as transgenics, and holds the same apoca- Internet Time (like dog years—they go by meets Darwin. Yet it’s astonishingly devoid lyptic possibilities as nuclear technology. It about seven times faster), it may not be of compelling social or economic rationale. could be used by rogue states or terrorists long before computers and robots are so Perhaps its most striking feature (just like to create microbe-sized, self-replicating much better that we are at so many things nuclear power) is the insubstantiality of its antipersonnel weapons designed to attack that they start feeling they don’t need us. all life within a target geographic area or actual benefits. We are assured that DOUBLE-EDGED TOOLS biotech is the only way to feed the world, genetic group. Worse, a simple but geneti- My purpose in summarizing these con- just as we were told that nuclear power is cally superior lifeform created by nanotech- cerns is not to scorn my colleagues in tech- the only way to keep the lights on. The nology and released without effective nological innovation, nor to sow panic, nor reality is just the opposite. Both technolo- controls could conceivably transform all to gripe about the general goal of progress. gies cost more and work worse than well- organic matter on earth into “gray goo.” As a technologist whose life’s work is inno- established alternatives outside the There is no need for humanity to take such vation to create a more secure, prosperous, commercial orthodoxy—alternatives that risks. Roughly comparable materials and and life-sustaining world, my questions are are better buys for customers but less prof- energy efficiency is already available, about means, not ends. itable for input suppliers. without nanotechnology’s scary downside, from other techniques described in my My purpose here is rather to invite us all SCIENTIFIC HUBRIS recent book with Hunter Lovins and Paul to use our critical faculties and our market The potential dangers of two other emer- Hawken, Natural Capitalism, and in Janine and political responsibilities to create the ging technologies—nanotechnology and Benyus’s book Biomimicry. sort of world we want. When the most robotics—have been eloquently discussed powerful force we know in the universe— I’m far less qualified than Bill Joy to com- in an article in the April 2000 issue of six billion human minds wrapping around ment on where robotics and artificial intel- Wired by Bill Joy, cofounder of Sun Micro- a problem—is harnessed, it should create ligence are taking us. But as one of the systems and the father of Unix and Java. happiness and satisfaction rather than suf- world’s most capable computer scientists, fering and injustice. Nanotechnology—the technique of making he deserves to be taken seriously when he self-replicating machines on a molecular asks whether this art, too, may change for Our new tools are so sharp, doubled- edged, even deadly, that we need to be sure they won’t injure us. If we can’t be Visit the new, improved confident about that, then we should lay www.rmi.org them down and choose safer ones. RMI’s website contains extensive The coming decades will be our species’ information on energy, trans- graduation test, when we discover portation, green buildings, and whether this opposable-thumbs-and-large- many other resource issues; sec- forebrain experiment was a good idea. The search for intelligent life on earth shows tions detailing everything you promise, but is now entering its most crit- ever wanted to know about RMI; a ical stage. Let’s not mess it up now by “library” of freely downloadable blandly assuming that whatever is possible publications; an online “book- is also wise. store”; links to the Natural Capitalism site and lots of other Amory Lovins co-founded RMI and is its useful resources; and, of course, co-CEO (Research). This article was the current and back issues of adapted from a column distributed by the Los Angeles Times Syndicate. RMISolutions. page 8 Fall/Winter 2000 Alcoholic Cars DEAR ROCKY Dear Rocky, I have visited Brazil several times in the fuel. The infrastructure needed for trans- past 40 years. Each time I have been porting and dispensing CNG is partly similar impressed that their autos were being by Jason to that for hydrogen, so switching to CNG fueled by alcohol—the number of alcohol- Denner, RMI could help pave the way for hydrogen. powered cars has increased dramatically Outreach and they all seem to be American made. Coordinator Why can’t we use alcohol until a better Houseboat Power “car” is perfected? Dear Rocky, —Dr. Morris J. Nicholson, producing companies—many of which I am currently designing a houseboat for Sun City, Arizona have interests in corn production—have personal use and am wondering what Dear Dr. Nicholson, not developed their plants for these feed- might be the best propulsion system. I am The question of alcohol fuel is a complex stocks. The economics and net energy considering using a lead-acid battery with one. Alcohol fuels come in two flavors, yield of ethanol can be favorable with the photovoltaic (PV) recharge. I envision ethanol and methanol. Either can be com- best techniques, though they’re not always something simple like two 120-volt DC bined with a small amount of gasoline for used. Similarly, most methanol is produced motors for standard propulsion and two use in normal vehicles, with minor modifi- from natural gas, although production from battery banks having ten batteries apiece. cations to fuel system and engine tuning. renewable biomass is possible. Of course an inexpensive fuel cell would In fact, versions of Dodge’s Grand We believe that hydrogen will ultimately be nice! But where would I get hydrogen Caravan, Ford’s Taurus, and Chevy’s S-10 replace all other fuels for most vehicles and in the middle of a lake like Powell? pickup are available that run equally well many other energy applications. But since —Robert Y. Jones, Aurora, Colorado on either E85 (85 percent ethanol, 15 per- direct-hydrogen fueling stations are not yet Dear Robert, cent gasoline) or straight gasoline. Brazil widespread (though they could be soon), uses ethanol-rich blends, though their RMI hasn’t gotten to the subject of marine your question about alcohol-fueled vehicles market share is declining. applications of fuel cells, yet. The U.S. as an interim step is appropriate. Navy has been using fuel cells in sub- In the United States, most ethanol is As long as we’re considering clean interim marines for some time, though, so the idea derived from corn. As corn grows it fuels, though, we must compare alcohol is not without precedent. absorbs carbon dioxide from the air, effec- with another immediately practical choice: tively sequestering the amount released Interestingly, the middle of Lake Powell compressed natural gas (CNG). Natural from burning ethanol in an internal com- could be one of the best places to get gas—methane—is the simplest hydro- bustion engine. Thus ethanol could be a hydrogen. One way to produce hydrogen “climate-neutral” fuel—if the corn is sus- carbon, having only one carbon atom sur- is through electrolysis: using an electric tainably grown. rounded by four hydrogen atoms. Alcohols current to split water into its constituents, have higher carbon/hydrogen ratios than hydrogen (H ) and oxygen (O). This could Unfortunately, in the United States most 2 methane, and thus emit more carbon be accomplished with PV-supplied elec- corn is grown using a great deal of fossil dioxide when burned. tricity. fuel—for farm equipment and chemicals— and in ways that deplete topsoil, negating Also, alcohol-burning internal combustion Because it can be done, of course, does much of the gain from corn’s being a engines can emit more phenols—a potential not necessarily simplify your task of finding renewable resource. Brazil’s ethanol—from health hazard in urban areas—than gasoline appropriate components with which to sugar cane, grown mainly to support jobs engines do. That’s why many urban transit build your system. If you do decide to in the impoverished northeast—raises sim- systems now favor CNG-fueled buses over create the world’s first fuel-cell-powered ilar issues. those that burn alcohol. houseboat, you’ll find some useful resources at our Hypercar Center® web- Ethanol can also be produced from agricul- At RMI we believe CNG represents an site (specifically http://www.hypercar- tural waste products, such as switchgrass attractive interim step to hydrogen for these center.org/dox/what_a9a.html). and corn chaff. However, most ethanol- reasons and also for one other: it’s a gaseous

page 9 Fall/Winter 2000 CLIMATE CHALLENGETHE Of Reducing Greenhouse Gases Down Under

USTRALIANS, AS WAS EVIDENT Both countries are lagging in part because industry is just a no go,” said senior RMI during the summer Olympics, they’re enjoying unprecedented economic climate researcher Rick Heede, who trav- Aare generally a sunny and opti- booms. The United States is also suffering eled to Australia in July with CEO Amory mistic people. But when it comes to from a lack of political will to address the Lovins for a series of energy-related meet- reducing the country’s greenhouse-gas problem: the Senate has yet to ratify the ings and presentations. emissions, there’s little to smile about, Kyoto Protocol, and President Clinton’s Since 1997, Australia has spent A$400 mate. proposed Climate Change Technology million on renewable-energy programs. RMI staffers began working in earnest this Initiative has been stalled in Congress. Another $400 million is earmarked for a summer on climate issues in Australia. The folks Down Under face some different Greenhouse Gas Abatement Program. But They found that while there’s a high level hurdles, including a coal-mining industry emissions keep rising. of concern about the problem among gov- resistant to any threat to its livelihood, and “We got the feeling that many Australians, ernment, community, and environmental a preponderance of older, energy-inefficient like many Americans, are happy going on activists, the reality is that emissions are housing. (Hence the importance of model the current course,” said Heede. “There is still climbing rapidly. projects like the Sydney Olympic Village— a lack of understanding, in both countries, Australia’s greenhouse-gas emissions grew see sidebar.) about how corporations can profitably by 16.9 percent from 1990 to 1998— KING COAL reduce their emissions.” hardly an auspicious start to meeting the Although Australia is responsible for only To that end, RMI is now actively engaged country’s commitment under the Kyoto 1.4 percent of global greenhouse gas emis- in helping Australian communities and Protocol to limit its emissions by 2010 to sions, it’s among the highest carbon emit- companies do just that. just 8 percent over the 1990 level. ters in the world on a per-capita basis. RMI and the city of Newcastle (pop. Does that remind you of something closer A major contributing factor is that 80 per- 250,000) are now working together to to home? It should. The United States is cent of its electricity is coal-fired (natural develop a plan for the city to meet more similarly delinquent in meeting its Kyoto gas and hydro account for the rest). Coal is than its share of Australia’s Kyoto commit- pledge to reduce emissions to 7 percent the country’s main commodity export. A ment. RMI signed a memorandum of below 1990 levels by 2012. The latest fig- reduction in the amount of coal burned understanding with the city and the ures show U.S. emissions running 9.9 per- domestically could hurt the coal-mining University of Newcastle to work on the cent above. industry, which has been weakened over project. If those patterns continue, both Australia the past few years by low global prices, “The city is considering a commitment to and the United States will miss their tar- poor profitability, and long-running indus- reducing emissions by 20 percent from gets. Their lack of progress to date is trial disputes. 1995 levels,” said Heede. “Newcastle has expected to come to light at the Sixth “While there are active programs and a good opportunity to be a model for other Conference of the Parties (COP-6) to the obvious concerns over climate change in cities. It was the most advanced of the Kyoto Protocol, to be held November Australia, there also seems to be an cities we visited in regard to reducing 13–24 at The Hague. unspoken consensus that anything that greenhouse gases.” threatens economic growth or the coal

page 10 Fall/Winter 2000 WHIZZING ROUND OZ And interest in energy issues is high in Sydney 2000: Newcastle. A Green Olympic Legacy “Amory gave the keynote address at a Newcastle energy town meeting,” said MI’S GREEN DEVELOPMENT • locating Newington near the Olympic Heede. “It was amazingly well-attended for Services played a role in venues and along new mass-transit lines a rainy night. Nearly 1,000 people came. developing the athletes’ vil- to minimize auto dependence; There was very strong participation and R lage of Newington for the Sydney 2000 • creating three pedestrian-focused neigh- commitment in evidence by city officials, Olympic Games…and beyond. borhoods and a commercial center that the local utilities, and the newly estab- The project was designed to provide will now connect with surrounding older lished Sustainable Energy Technology divi- housing for 15,300 athletes during the neighborhoods; sion of the country’s main energy R&D Games, and then to be reused as an envi- agency.” • installing solar water heaters and grid- ronmentally responsive new town with connected, one-kilowatt photovoltaic Heede and Lovins held more than 30 4,500 permanent inhabitants. The project arrays on the roofs of 665 of the homes; meetings in Australia during their July was privately developed by Mirvac/Lend • eliminating the need for air condi- visit. While most of their agenda was Lease, one of the largest developers in tioning through the use of energy-effi- devoted to climate issues, they also dis- the world. cussed sustainable tourism with grassroots cient design and passive ventilation; Of the three neighborhoods, one was activists in Tasmania, briefed British • undertaking extensive environmental built with temporary structures for the Petroleum on electric-utility and analysis and screening of building mate- Games, which are now being sold and HYPERCARSM developments, consulted with rial choices; and moved to other sites in Australia. The Melbourne University Private on starting a other two neighborhoods are being con- • restoring eucalyptus-tree savannas and green business school, discussed HYPERCAR verted from dormitories to completed creating a channelized stream for the technology with automakers, and gave single- and multi-family homes. open-space area. numerous presentations and interviews on Thanks to the highly efficient house Natural Capitalism. Green Development Services founder and lead consultant Bill Browning was designs and the roof-mounted solar They also met with the environment min- part of the team that won the design- panels, the neighborhood will actually be ister and other federal officials in Canberra, build contest for the village. His role was able to sell power back to the grid at state ministers and officials in Queensland essentially that of an in-house bench- peak hours. and New South Wales, and municipal offi- marker: he helped the group make sure “It is one of the more intensive distrib- cials in a variety of cities, including the concepts it was using for Sydney uted-power experiments going on any- Melbourne, where they helped launch that were of gold-medal quality. where,” said Browning. city’s Climate Action Plan which seeks to reduce emissions by 10 percent from 1990 “I was consistently asked ‘Is this the levels by 2010. best we can do?’ and ‘Who is doing something similar?’” said Browning. “I feel we were able to give Australian “In return, I was able to ask ‘Have you companies, communities, and government thought of this?’” officials a real sense of the opportunities to reduce their greenhouse-gas emissions,” In addition, Browning helped link the said Heede. “We were giving activists a Australian members of the team with springboard for further action on both cli- American and European product man- mate abatement and corporate sustain- ufacturers. ability.” The team of designers, builders, and —Brent Gardner-Smith consultants thought of myriad ways to “green” the new village, including:

• cleaning up an abandoned naval AllsportAustrailia, 38Atchison St. St. LeonardsPOB# NSW 215,2065 St. Leonards NSWPart 2065 of Getty Images Group munitions depot at the site; Photo: Mike Hewitt, Olympic Stadium, Sydney

page 11 Fall/Winter 2000 ENERGY CHINA: REACHING FOR GREEN GOLD T HAS 1.25 BILLION PEOPLE and an energy I A coal-fired power plant looms over mix that depends Shanghai’s harbor. Photo: Jeffrey heavily on coal. Aaronson/Network Aspen Already a major pol- luter, it’s expected by many climate experts Second, economics: new natural-gas-fired moving rapidly,” said Lovins. “Our Chinese to become the world’s biggest emitter of power plants typically outcompete tradi- friends say they have never seen anything greenhouse gases. Yet it wants to host the tional coal-fired ones, even in a country happening so fast.” 2008 Olympics—and to do so under smog- where coal is plentiful. (The same is true in WARTIME URGENCY free skies. the United States.) That gas-fired power In the past year, China has moved with Will China change? Can China change? plants are much cheaper and quicker to build than coal-fired ones is also a great “wartime urgency” to install a natural-gas It’s possible. And signs of swift change are advantage. infrastructure in five major cities, construct increasingly evident. six 320-megawatt gas-fired power plants in A third factor is the growing public-health While coal still accounts for a whopping 70 Guangdong Province, and create a nation- emergency caused by chronic air pollution percent of China’s energy mix, the country wide natural-gas network. from coal-burning. In that regard, the has made significant strides recently in Beijing authorities learned a lesson last year In Beijing, in an effort to promote natural- reducing consumption: between 1997 and when the Communist Party decided to cel- gas power, the city is preparing a slew of 2000, the country’s coal output dropped ebrate its 50th anniversary with a “blue measures to phase out local coal consump- from 1.4 to 0.9 billion tons. That decline sky day,” a rare event in the polluted city. tion. Bejing plans to stop building coal- has resulted from a combination of So the government shut down polluting burning power plants and coal-to-gas increased efficiency and a shift from coal to industries and prohibited the burning of generators, reduce the use of coal-burning natural gas, oil, and renewables. high-sulfur coal. equipment, speed up construction of nat- ural-gas power plants, establish no-coal-use THE BLUE-SKY FACTOR “They found they rather liked the blue sky areas, and increase the number of house- The Chinese are embracing alternatives to and decided to get serious about air pollu- holds using natural gas. coal for several reasons, according to RMI’s tion,” said Lovins. The change in energy policy in China the Amory Lovins, who with Hunter Lovins par- Yet a fourth factor motivating China to use last two years represents “a sudden genera- ticipated in a three-day symposium on envi- less coal is its bid for the 2008 Olympic tional and bureaucratic revolution,” Lovins ronmental protection in Shanghai in July. Games in Beijing. China views the Games said, noting that “people who understand The first is rail capacity. The sheer volume as a unifying project and knows that it gas” have at last started to gain clout com- of coal needed to keep generators gener- stands a much better chance of winning petitive with that of the coal-favoring tech- ating and boilers boiling is severely ham- them if it cleans up its air. nocrats who’ve held sway for decades. pering the country’s ability to move other “They have very little time to show an According to the U.S. Energy Information goods on its rail infrastructure. improvement in clean air and they are Administration, natural gas is expected to page 12 provide 8–10 percent of China’s energy by fast if you accept the rather high official PLAYING LEAPFROG estimates of China’s GDP growth. 2020, up from just 3 percent now. The country, however, is still in an ecolog- The move to natural gas offers a significant Renewable energy is also catching on. In ical crisis. As the population gets richer, it’s climatic improvement over coal. While gas 1993, China had 15 gigawatts (GW) of eating higher on the food chain, causing is also a fossil fuel, it contains half as much renewable electric-generating capacity, more land to be committed to growing carbon as coal and, in a combined-cycle almost all of it small hydroelectric projects. grain for livestock to produce meat. Nearly power plant, can burn twice as efficiently, By this year, the planned total is 20 GW; 2 million new vehicles take to the roads yielding a roughly fourfold reduction in for 2010, it’s 32 GW, including 28 GW of each year, and analysts expect that number carbon-dioxide emissions per unit of elec- small hydro and 3 GW of wind; and for to reach 3 million or more by 2010. tricity output. 2020, it’s 49 GW, including 39 GW of Factories catering to the growing pur- During 1997–99, the Chinese economy small hydro and 8.5 GW of wind. (These chasing power of 1.25 billion domestic grew by about 8–9 percent per year, but figures deliberately exclude large hydro consumers—not to mention the ever-bur- total primary energy use fell by about 4 projects, which typically do more environ- geoning export market—add to the air and percent, accelerating a trend that cut mental harm than good.) water pollution. Forests are being felled, national energy intensity in half during the “China is making a large, unheralded con- wetlands filled, groundwater mined, and 1980s (by the late ’90s, even electric inten- version toward sustainability by virtue of biodiversity lost at an alarming rate. sity was decreasing). Since 1980, China its energy policy reversal,” said Lovins. “It’s an ecological disaster zone,” Lovins has cut its energy intensity at least as fast “They deserve a lot of credit.” as the United States has—nearly twice as continued on page 23

TAIWAN NO MORE NUKES

HOULD TAIWAN’SMONOPOLISTICUTILITY, TAIPOWER, The team also suggested that Taiwan enhance its policy to open complete the island nation’s fourth nuclear power electricity and natural-gas markets to competition. Indeed, they Splant? felt that the combination of these two separate initiatives, prop- A team of four U.S. energy experts, including RMI’s Amory erly understood and harnessed, would produce a gusher of faster, and Hunter Lovins, this summer recommended abandoning safer, cheaper, and more secure options. the project—and the Taiwanese government appears poised to “Under competitive conditions, you’ll get more electrical services follow that advice. than you need and they would be cheaper than building the rest The team met in August with Minister of Economic Affairs Lin of this nuclear plant,” Amory Lovins told the Taiwanese media at Hsin-yi (whose ministry oversees electricity), members of the a press conference on August 4. Fourth Nuclear Power Plant Reassessment Committee (which Fellow team member Ed Smeloff, executive director of the Pace was convened by the Ministry of Economic Affairs), the Energy Center at Pace University and a former board president of country’s top two EPA officials, legislators, technical experts, the Sacramento Municipal Utility District (SMUD), agreed, noting and journalists. Their trip was sponsored by the W. Alton Jones that 47 nuclear plants already under construction have been can- Foundation. celed worldwide since 1978. Smeloff also described the closing of The Taiwanese government was trying to decide whether to the operating Rancho Seco nuclear power plant near Sacramento; complete the $5.4-billion, 2.7-gigawatt plant, which is already SMUD’s investments in efficiency and renewables met demand, one-third built. The team’s advice was to invest instead in effi- cut debt and user rates, and created good jobs to boot. cient use of electricity, industrial cogeneration, independent As this newsletter went to press, Economic Affairs Minister Lin power production, fuel cells, and renewable energy. issued a recommendation to cancel the plant. The legislature may “Taiwan has a lot of other options than completing the plant,” yet intervene in the final decision, due in November, but the said Amory Lovins, “and they’re all cheaper and more reli- plant’s supporters concede that Lin’s decision may have doomed able.” the project.

page 13 Fall/Winter 2000 Administrative pyramids and command- OTHER VOICES and-control systems are on their way out, consultation and consensus are increas- ingly “in.” Y SWEEP OF THE HORIZON SHOWS presents humankind with a vast range of ten worldwide revolutions new ethical choices and political puzzles. FIVE ASPIRATIONAL Mtransforming our world. They In this and other ways, we—homo we REVOLUTIONS are concurrent, but not parallel—rather, hope sapiens—are becoming increasingly The above five transformations are driven they are intermixed, interwoven, interac- responsible for our own evolution. quite directly by scientific discovery and tive. Third, computers, serving as prosthetic technological innovation. The other five are facilitated, even intensified, by science FIVE TECHNOLOGICAL extensions of our brainpower, are replacing and technology. But they are driven by uni- REVOLUTIONS much of the repetitious drudgery people have always had to endure. They have cer- versal aspirations of the human spirit—by First, the sudden increase in explosive tainly brought in their train new puzzles a widespread sense of entitlement to power has clamped a lid on the scale of about the future of “work.” But I can’t “enough” (the fulfillment of basic human warfare. That’s a first in human history. believe that eliminating drudgery will be needs), and beyond that by equally basic The invention of weapons too big to use bad news for the generations to come. human desires for a sense of achievement, turned much of big-power military strategy justice, solidarity, and participation. into an expensive information game. Fourth, linking faster computers with more reliable telecommunications enables us to So, sixth, the idea of human rights for Second, biotechnology, including the deci- model and simulate vast systems such as everyone has become the world’s first truly phering of information in living genes, the global atmosphere, the human universal idea-system, the first superstar in the history of polit- ical philosophy. It has come to mean rights not only for women, captured LEADERSHIPF O R T H E soldiers, and polit- ical prisoners, but GLOBAL CENTURY also for children and the aging, for by Harlan Cleveland racial and ethnic minorities, for immigrants and genome—and fallout from refugees, and for all manner of people once nuclear explosions. This new considered “untouchables.” analytical power is sensitizing Matching universal human rights with uni- us to the consequences of versal human responsibilities, however, has what we the people are doing been left to be worked out in the 21st cen- to our natural environment— tury. and what we might inadver- Seventh, a global fairness revolution is tently do to ourselves. widening as the spread of knowledge Fifth, the widening spread of shows the disadvantaged in every society knowledge is creating a “skill what they are missing—and is providing revolution” that provides so them with new means of communication many more people with the to express their rising resentments and attributes and ambitions of help them “overcome.” leadership as to create a funda- Eighth, fierce loyalties to cultural identity mental change in the tech- with less-than-global communities— nology of organization. page 14 Fall/Winter 2000 bonded by nationhood, ethnicity, race, reli- Information expands as it’s used—no isn’t necessary to glue future creativity to gion, ideology, and even occupation—are “limits to growth” here. It is readily trans- the antique notion of personal property colliding everywhere with the homoge- portable at close to the speed of light. rights. Rather than digging in now to nizing cultures of “modernization.” Information leaks so easily that it’s much defend patent and copyright law, those Ninth, an emerging ethic of ecology is pro- harder to hide and to hoard than tangible crumbling ramparts of information-as-prop- ducing a revolution in human self-con- resources were. Information cannot be erty, we will be wise, early in the 21st cen- trol—based not on “limits to growth” but owned, only its delivery service can. tury, to invent, elaborate, and project a on limits to thoughtlessness, unfairness, more viable concept that leaves plenty of and conflict. The result, in many domains, room for incentives for creativity, yet is actually a “growth of limits.” doesn’t rest on “ownership of information” The striking thing as its moral, legal, economic, and philo- Tenth, openness, market incentives, and sophical basis. the practice of pluralism are currently on about these wind- display in some of the unlikeliest places. Moreover, the footings on which “trade Authoritarian and totalitarian systems are shifts is the extent secrecy” and government classification sys- simply unable to compete with looser sys- tems rest are just as vulnerable as patent tems that “go with the flow” in the global to which they are and copyright law to the predictable torna- flood of knowledge. does of change. They also deserve a skep- all rooted in the tical new look early in the Global Century. THE INFORMATION AGE historically sudden DWINDLING DISTANCES These global tides and currents are all related to each other. Indeed, modern biol- spread of knowl- A second example starts with the dwin- ogists and have joined a long list of spiri- dling relevance of distance, which widens tual prophets, inspired poets, and secular edge. the definition of “community.” philosophers in insisting that everything is Down through history community has related to everything else—and that, in mostly meant the ties among people who consequence, each of us has to try and The spread of information empowers the lived or worked nearby. Community can think hard about “the situation as a many, by eroding the influence that once now, much more readily, mean people whole.” empowered the few who were “in the with similar interests and motivations The striking thing about these global wind- know.” And giving or selling information working together in “virtual teams” wher- shifts is the extent to which they all are doesn’t give rise to “exchange” transac- ever they are living, working—or even rooted in the historically sudden spread of tions; these are acts of sharing. traveling. knowledge—which in turn is the conse- These simple, pregnant propositions about It is still premature, but it’s no longer quence of upheavals and opportunities cre- the nature of information, as they sink in laughable, to speak of “the end of geog- ated by the marriage of computers and around the world and down the genera- raphy.” Much of my life has been focused telecommunications during the last quarter tions, should help us sort out some of the on international affairs, and I would have of the 20th century. big conundrums that still puzzle us in the to be blind not to have noticed that geo- Peering now into the 21st century, we new millennium. graphically “regional” bodies have turned out to be the least effective and most can’t know just what will happen, or REDEFINING INTELLEC- underemployed of the many kinds of inter- when. But we already know something TUAL PROPERTY more important: why it will happen. national organizations invented during the Let’s take three examples. past 55 years. Information—symbols, not things—will be First, if information cannot really be playing the lead role in world history that The European Union may yet prove to be “owned,” then the whole idea of “intellec- physical labor, stone, bronze, land, min- an exception to this broad-brush general- tual property” is clearly an oxymoron, a erals, metals, and energy once played. ization; but even “Europe” hasn’t yet come contradiction in terms. We’ll have to burn into our consciousness together enough to project its values how very different information is from all It is, of course, quite possible to encourage worldwide in the 21st century. and reward creativity—it happens all the its predecessors as civilization’s dominant continued on page 23 resource. time in universities and elsewhere. But it

page 15 HOT SEAT

I take [the article writer’s] statement to We received several challenging questions to facts and fig- mean, correctly, that import dependence, ures given in the last newsletter.The following point-coun- conventionally measured in share of con- terpoint between a critical reader and Amory Lovins was particularly interesting.The exchange occurred via e-mail. sumption, has already regained and passed its earlier crisis-period levels. He’s right. I believe what matters to dependence and to Stephen B. Andrews: China, by the way, officially projects a its domestic perception is share of con- 2000 coal burn that’s back to the 1986 On page 2 [in an article on global sumption. You’re correct that exporters level! warming, you state:] “Coal is already may have a different perspective, but that defunct or on the way out in most of the Andrews: wasn’t [the writer’s] point. The scope for world. Its use is now falling even in the On page 25 [you state that:] “...American international conflicts depends on (among United States, China, Russia, and Eastern dependence on imported oil [is] now back other things) still a third perspective— and Western Europe.” to early 1970s levels.” [Here Andrews market flexibility and share. Then how do you square your statement cites official figures showing that U.S. Andrews: with [June 1999 figures showing that petroleum imports went from 6,025 to Lastly, apart from errors, I want to con- world] consumption is stable over the 9,612 million barrels per day during tinue challenging the RMI company line period 1988–98?… While your other fig- 1973–99.] ures are correct, consumption is up in on the world’s future oil consumption.... Hello!? What’s wrong with the above pic- Japan, India, South Korea, and South Please consider these facts, then respond ture? Imports are up 60 percent!! More Africa, hence the leveling. How can you to the question below if you have a importantly, imports are up 3.5 mb/day. I call this “defunct” or “on the way out in moment: don’t think the Saudis give a rip what the most of the world”? A. There are some 700,000,000 mostly “percentages” of imports are at this point. inefficient gasoline and diesel vehicles in Amory Lovins: They sell millions of barrels of oil, not per- the world today-—inefficient, at least, centages of barrels of oil. In the year You were right up to 1998. We’re right compared to both hybrids and your pet 2010, are we more likely to have a con- starting in 1998. Chris Flavin [of the fuel-cell-powered vehicles. While cars in flict with the Chinese over millions of bar- Worldwatch Institute] wrote…on 15 the U.S. last an average of 16 years, those rels of oil which they AND we want to March 2000 that “…the good news in very same vehicles are often spirited out import, or over the percentages which we world energy markets the past two years is of the country to be maintained for many want to import? almost entirely in the coal sector. more years. While no reliable figure is “For the first time, we can say that world Lovins: available, an estimated life expectancy of coal demand is on an unambiguous down- What matters to “dependence” is not the 20-plus years for the world mechanized ward track—in Eastern and Western absolute level of crude imports…but net fleet is probably not unrealistic. Europe, Russia, China, and even (finally) imports as a share of products supplied. B. There are some six billion people in the North America. This share is graphed for 1973-99 at world (a few handfuls more than when “These declines have been so sharp in www.eia.doe.gov/pub/energy.overview/ “...Stone Age man ran out of stones....”). 1998 and 1999 that Worldwatch is now monthly.energy/graph/mer1_7.pdf. You’re C. The appetite for cars worldwide is estimating that global carbon emissions right that the statement could have been powerful; fortunately, economics in the have fallen for two consecutive years. As a clearer if RMI Solutions had published developing world limit the purchasing result, carbon emissions in 1999 were more information. But the graph shows power there to some degree. actually slightly below the 1996 level. The that the relevant fraction was 49.6 percent D. The appetite for gas-guzzling SUVs is last time the world had this much ‘good in 1999, very similar to, but having sur- mind-numbing in this country. Light-truck- news’ on the carbon front was during the passed, the 46.5 percent in 1977 (the pre- category sales are over 50 percent. last oil crisis 20 years ago.…” vious peak).

page 16 Fall/Winter 2000 E. The unwillingness of the U.S. driving Lovins: Andrews: public to tolerate rises in gasoline prices, Collectively these could well have a …And please don’t tell me that we’re from either taxes or short-term supply market share around half—more like two- going to elect Al Gore plus a Congress issues, is almost frightening. As per 1996, thirds if one is optimistic.… You can run that will favor his enviro strategies, which politicians are pandering to see what they the [fleet] numbers yourself. Just remember will give us the leadership to move Detroit can do to “ease the driving public’s pain” that improvement in the marginal vehicles’ along faster and make the country wake until supply/demand [makes] the gasoline fuel economy by then should be roughly up to the climate change problem. I saw price issue fade away…. four to eight times [that of] the same-class how effective Clinton was in 1993 when F. Two of the world’s three largest oil pro- new vehicles today, because platform he tried to pass the BTU tax.… I saw how ducers (the U.S. and the former Soviet physics, not just driveline, will be [Energy Secretary Bill] Richardson wore Union) reached their peaks in oil produc- improving markedly; that a rapidly holes in his knees trying to get OPEC to tion a while back (1970 and 1988, respec- increasing fraction of the fuel burned will open the oil spigot well in advance of [this tively). not be petroleum-based (initially mainly year’s] elections. natural gas reformed to hydrogen, first G. World oil discoveries peaked during Lovins: 1962 (USGS figures). Today, we discover downstream and later at the wellhead, and I think you’re unnecessarily fixated on the one new barrel of oil for every four barrels later mainly renewable electricity); and necessity to change federal policy. Our we produce. that accelerated-scrappage policies to hasten the stock turnover will be very strategy is to make policy irrelevant to the H. Several oil industry retirees and current attractive. All three of these effects mul- transformation of the car industry, because oil company officials have attested to the tiply. it’s just as random a variable as world oil fact that world oil production will peak, price, and we don’t want success to hit a high point in daily production and Andrews: depend on a random variable. then slowly decline, between 2005 and Given the above facts…unless you foresee 2010. (Shell is more optimistic, using per- a very high level of efficient vehicles CLARIFICATION haps 2025 or 2030; BP has previously flooding the market virtually overnight In “Return of the Nuclear Salesmen” acknowledged 2010 or so.) and worldwide—at nearly 100 percent of (RMI Solutions, Spring 2000), we stated Lovins: annual production by 2010—I question that 95 percent of all new U.S. energy how you can make the statement “That’s About right until G; remember that there’s “supply” during 1996–98 came from why oil prices and shortages are ulti- no point spending money now to prove up efficiency improvements. mately beside the point.” I hope you are reserves when you have ample ones to right because if you aren’t, then in my This statement was based on an analysis extract within your E&P [exploration and opinion the above is a very irresponsible of the economy’s “energy intensity”— production] time horizon to meet your statement, leading one to believe that all the amount of energy required per dollar demand and market-share expectations. H by itself “evolution will take care of every- of GDP. The economy grew faster than depends on tacit assumptions about thing” in a timely “technology über alles” energy consumption during 1996–98, so demand growth; you need to consider not fashion, without any economic hardship, energy intensity declined. Had energy only geological and economic/technolog- let alone social upheaval. intensity remained constant at 1996 ical supply but also efficiency and substitu- levels, we calculate that the increase in tion if you’re to have any insight into Lovins: energy consumption would have been future supply/demand balance. This is I’ve been assessing detailed options for effi- 20 times greater than it actually was in probably where we most differ. ciency and substitution in this industry for 1998. Thus energy use increased by only Andrews: nearly 30 years. For what it’s worth, total 5 percent (1/20th) of the amount by U.S. primary energy consumption is now which it would have otherwise risen. Given the above, I have a serious question within 2 percent of the “soft energy path” for the RMI Hypercar Brain Trust: How We attributed the other 95 percent to I published in Foreign Affairs in 1976. many hybrids and fuel-cell vehicles do you energy efficiency. However, some of this That’s not entirely coincidental. anticipate in 2010? (Round numbers of reduction is arguably due to structural millions will do)…. changes in the economy, such as the increasing proportion of GDP due to information techology industries.

page 17 Fall/Winter 2000 RMI NEWS

which will better reach the primary busi- The company’s environmental program Natural ness audience in China. includes a nonprofit, employee-funded and Capitalism The book is due out in Japanese in late employee-directed Environment Goes Global November from Nihon Keizai Shimbun, is Foundation, which awards funds to local Natural Capitalism: Creating being translated into Russian by the environmental organizations. It was also The Next Industrial Revolution continues Russian Academy of Sciences, and is being one of the first ski-resort operators to to be sought after by readers around the translated by commercial publishers into create a full-time environmental director world. Danish, Italian, Korean, and Estonian. position.

On to Adopt a Greener Goat—Yes, a Goat Pastures Last summer 600 cashmere goats spent nine days happily munching on When RMItes move on to greener pas- Canada thistle and houndstongue—nox- tures, it’s a good thing. ious weeds served up compliments of RMI That’s what RMI alum Auden Schendler on the 1,000-acre Windstar Land has done, and he’s gone from strength to Conservancy property in Old Snowmass, strength. A former RMI research associate Colorado, home to RMI’s research center. and newsletter editor, Auden left last The goats, brought in from Wyoming, eat spring to become the 90 percent weeds and 10 percent grass, Aspen Skiing leaving more food for wildlife and allowing Natural Capitalism is now Company’s environ- available in softcover. the native grasses once again to dominate mental affairs man- the pasture. Goats naturally prefer weeds The hardcover edition is now in its sixth ager. This September, such as thistle and houndstongue, which printing (with 42,500 copies sold at last he was named the are invading pastures across the West, and count), and the softcover edition was company’s director they have voracious appetites. released in October. Both are published by of environmental Little, Brown in North America. affairs. The only down side to using the “tran- sient” goats at RMI was the timing of the The book is also doing well in the UK “What I learned at RMI was absolutely grazing. (where it’s published by Earthscan), critical to what I’m doing here, and I use Germany (Riemann/Bertelsmann), and many of the same principles and ideas,” “Nature dictates when the plant blooms Brazil (Cultrix). Schendler said. “In fact, I’ve described my and with the drought that we had this year everything was a month later than we In China, the simplified-characters Chinese department as a small version of RMI built expected,” said RMI land manager Paul edition by Shanghai Popular Science Press into the corporation.” Buch. “The goats had to be scheduled sold out on the second day of availability. The Aspen Skiing Company has been rec- months in advance and the timing of the The mayor of Shanghai read it on the first ognized in the ski industry for its environ- grazing was not optimal. With our own night of publication and the next day mental programs. It is a two-time winner, small herd on site we could hit each area ordered 700 copies for all his top officials in 1998 and 1999, of the Times Mirror as it blooms and then repeat the grazing to read. Golden Eagle Award for Overall again during the summer.” Chinese publishers are now reviewing pro- Environmental Excellence in the ski And so, with that realization, Buch has posals for a complex-character edition, industry. launched an adopt-a-goat program so that

page 18 Fall/Winter 2000 RMI can have its own herd to help manage “This challenge is a great way for a the land. RMI For Kids prospective donor to get additional The newest addition to the RMI web- “We need 50 to 100 goats,” said Buch. leverage for their gift,” said RMI Director site, RMI for Kids, is going live this fall. “The program will be set up so that $100 of Development Dale Levy. This is the Institute’s first non-local pro- ‘buys’ you a happy and productive goat “We’ve already had several people and gram to bring its unique approach to here on our property. It costs $50 for us to foundations respond to this challenge, and resource efficiency and whole-systems buy a goat and then another $50 on have secured nearly $100,000 toward the thinking to younger audiences. average to cover transportation and veteri- goal,” he added. nary costs.” A startup grant from the Nathan Ohrbach Foundation has enabled us to create a rudi- Cashmere goats have proven to be effec- mentary RMI for Kids section consisting of tive weed-eaters. They’re smart, easy to Stock Gifts: energy information and links for kids and handle with a trained dog, and look great Least-Cost teachers. To reach it, visit www.rmi.org in sweaters of their own making. The goats Giving and click on the “RMI for Kids” button on A growing number of RMI supporters the left. are discovering the benefits of donating Further funding is needed to realize our stock. extensive long-term plans for the program. By giving appreciated securities to RMI, We hope to grow it to include information you are entitled to a federal income tax on all of RMI’s activity areas, including deduction based on the current fair market “Natural Capitalism for Kids.” value of the security. You will also avoid The idea for RMI for Kids grew out of the paying capital-gains tax on any increase in many requests for information about our the value of the stock given. That’s two work that we’ve received in recent years ways to save, potentially enabling you to from children, mostly fourth through sixth make your usual gift at lower cost, or to graders. Outreach coordinator Jenny make a larger gift at no increased after-tax Constable realized that none of our mate- cost. rials were designed to speak to anyone This program isn’t just for the well- younger than high school students. endowed. RMI has received stock gifts If you have any content suggestions for ranging from $150 to more than $30,000. will be deployed on different portions of RMI for Kids, or any ideas on obtaining And just in case you were wondering, RMI the land where weeds are a problem, further funding for it, please contact Jenny immediately liquidates donated stock— including wetlands and steep areas where Constable at [email protected]. access is difficult. In the winter, the herd we’re not in the business of speculating on will be contracted out to properties in the stock market—and doesn’t have to pay warmer regions. New tax on the cash raised from its sale. So don’t delay. Contact Paul Buch at Challenge Think of your gift to Rocky Mountain [email protected] to begin the adoption pro- Grant Institute as another savvy investment cedure for your very own cashmere RMI opportunity—an investment in natural cap- RMI is pleased to announce that the goat. ital, which yields dividends on a global Sandler Family Supporting Foundation has scale. made a challenge grant to RMI of If you have questions about giving appreci- $100,000, provided that RMI raises ated securities to RMI, please contact another $200,000 from new individual, Development Director Dale Levy or foundation, or corporate donors who give Comptroller Christy Hamrick at 970-927- $10,000 or more by December 31, 2000. 3851.

page 19 Fall/Winter 2000 WHAT ARE YOU growth; working with mental models; READING? building shared vision; team learning; and systems thinking (the last, Fifth Discipline, being the one that integrates the others). Ben He starts with a critique of traditional His compelling and beautifully articulated Shepherd, metaphors for developmental biology and examples breathe life and bring context to Intern, Green genetics: namely manufacturing and com- abstract concepts. Development puters. The problem with the manufac- Services turing metaphor is that goods are made by Dhara Vala, Todd Buchholz’s humans or machines—that is, the making is Intern, newly revised book, done by an outside agent—whereas organ- Natural New Ideas From Dead isms make themselves. Likewise, develop- Capitalism Economists (Plume, 1999), explores “clas- mental processes are fundamentally unlike Practice sical” economics and its application to the way a computer works because the today’s world. computer’s hardware is separate from, and Upsizing: The Road external to, the program’s execution, to Zero Emissions— Buchholz lightens the load of the dismal sci- whereas the organism builds itself as it pro- More Jobs, More ence with commentary and humorous gresses through its stages of development. Income and No Pollution, by Gunter Pauli asides on traditional economic theory and (Greenleaf, 1998), is a small book with a even on the lives of the economists them- Cohen’s metaphor of artistic and serendipi- profound assertion: “Every politician and selves. For instance, did you know that tous creativity challenges the conventional corporate executive should know that it is Adam Smith never taught (or even took) an notion of genes as the “master control” possible to improve the productivity of an economics course? mechanism, and presents a view in which genes have a more modest role within a enterprise, while generating more jobs and Re-examining the dead economists’ ideas in system of other cellular components and dramatically reducing pollution.” light of current events, Buchholz asks ques- within the context of the whole organism. Pauli shows how “byproducts” and “waste” tions like: Would Karl Marx have to revise can be used in ways that are more profitable his theories in light of the fall of the Soviet than the primary products of an operation. Union? What would Thomas Malthus say Kate Parrot, Considering tropical fruit plantations, for about the current state of immigration? Research example, he notes that most waste huge What would they all think of the rise of a Associate, volumes of biomass. But by applying tech- global economy? Good questions. Good Economic niques to close the loops, such as biore- reading. Renewal fining ethanol and extracting valuable I kept pushing Peter chemicals, the value of the “waste” Tom Feiler, Senge’s The Fifth increases dramatically, and can help trans- Managing Discipline: The Art & Practice of the form local economies. Learning Organization (Doubleday, 1990) Director, RMI The book’s value lies in its in-depth case around on my plate of bedside reading The central theme of studies, ranging from a brewery in Fiji that material like a child working dinnertime Enrico Cohen’s The uses wastes to help grow mushrooms to a peas. Art of Genes: How Swedish island dedicated to the principles Organisms Make When I finally did pick it up, I was of “zero emissions.” enthralled. This book teaches about learning Themselves (Oxford This is not light reading, but Pauli offers up in the experience of an individual, a group, University Press, 1999) is that metaphors both hope and pragmatic solutions for an organization, or a nation. matter—that the way we picture things redressing the sad fact that “humankind is shapes our understanding of concepts. Senge writes engagingly about how systems the only species on the planet capable of Cohen argues that the mental models that cause their own behavior. He also enumer- generating waste no one wants.” currently guide the science of biogenetics ates the five disciplines of the “learning are misleading. organization”: personal mastery and

page 20 LIFE AT RMI INTERN INVASION

MI HAS ALWAYS WELCOMED contain one lie. Spot the lies, they said, expect to see them again—as leaders in an intern or two, or a few at a and we’ll cook you all a gourmet dinner. their fields, or as corporate executives, Rtime, particularly in the It was hard to find the fibs, as so many of perhaps, making decisions that will ben- summer. College students who’ve heard the interns had already done so much in efit both their firms and the world in RMI staff speak, or who’ve read our publi- their careers. which they do business. cations or learned about the Institute Our summer interns brought fresh *** through a professor, are often anxious to insights and challenging questions. They As this year’s Konheim Fellow, C.C. Gill come and be a part of RMI. They learn a researched globalization issues, rethought continued a long and honorable tradition lot and the experience serves them well the approach we’ve taken on getting busi- here at RMI. The Konheim Fellowship, nesses and communities to work together, which supports an annual internship with helped develop a “toolkit” that companies Green Development Services, was estab- can use to put the principles of Natural by Marty lished by Bud and Carolyn Konheim in Capitalism to work, and researched case Pickett, memory of their son Eric, who died in a studies in green development, distributed 1991 sea kayaking accident. Executive electricity, and other RMI-related disci- Another family is currently raising money Director plines. to endow a summer internship in The internship program offers yet another memory of their late son, whose “dream” advantage to RMI—we get a good look at had been to work at RMI. Similarly, the potential employee candidates! This year, families and friends of longtime RMI sup- on their résumés. In return, RMI gets the crop yield was high. We hired four of porter Margaret Frantz and RMI’s late much-needed assistance and benefits from the interns to stay on staff. The others land manager David Tice make donations the interns’ fresh perspectives on the have gone back to school or the market- to “sponsor” interns. place, brimming with fresh ideas, newly world. These internships are fitting, living memo- gained knowledge, and, hopefully, fond Well, the summer of 2000 was one for rials to individuals who supported the memories of a summer at RMI. But we the record books—we had a bumper crop Institute’s work and ideas. of 13 interns! The decision was made to Top Row: Chad Laurent, Kate Parrot, Amanda Ayres, Ben Shepherd. increase the number of internships partly Bottom Row: Adam Berman, CC Gil, David Payne, Alice Hartley. because we had so many projects we Not Pictured: Holly Harlan, Dhara Vala, Ken Wicker,Lewis Cassidy,David Kaplan. needed help with, and partly because we had hundreds of applicants to choose from. The selection process wasn’t easy; we had some extremely qualified and experienced applicants. I think we did well to whittle them down to just 13. The camaraderie among the group this summer was strong, aided by hiking and camping trips in the surrounding moun- tains, and volleyball in the meadow in front of our building. The interns also came up with a unique way to introduce themselves: each one wrote a bio of him- or herself, and each bio was supposed to

page 21 Fall/Winter 2000 But the reason for the perception that WHERE DO WE GO CALFORNIA ENERGY MYTHS supply expansion has stalled is that FROM HERE? California utilities aren’t building large, If lawmakers, regulators, and consumers continued from page 2 high-profile power plants. Indeed, in the are looking for someone to blame for last decade about three-quarters of Myth #3: High tempera- California’s power shortages, the most California’s new plants were built by non- tures are to blame obvious place to start is the combination of utility generation companies—a new breed laws and regulations that have lately Temperatures this summer were high, but of entrepreneurs that compete in the stalled California’s cost-effective invest- hardly extraordinary. power markets with the traditional ments in using electricity more efficiently, Utility executives are well aware of the monopoly utilities. The average size of and that have resumed the old, bad system simple relationship between hot summer their plants is just 20 MW, compared to of rewarding utilities for selling more elec- weather and increased air-conditioner use, 300-500 MW for typical utility coal-fired tricity rather than cutting customers’ bills. the largest driver of summer electricity plants and 1,000 MW for nuclear plants. Optimal demand. But inadequate planning by utili- In contrast with large, centralized utility industry energy ties and their government regulators to plants, the small plants are distributed restructuring respond effectively to rising electricity use throughout the grid, thus boosting the reli- would reward the best buys most and the has exacerbated the problem and pre- ability of the entire system. In addition, worst buys least. The best buys—efficient cluded more proactive and cost-effective because most use cleaner-burning natural use, then distributed generation—are responses. gas or renewable energy sources, they sig- plenty big to do the job. For instance, investments in energy effi- nificantly reduce the air and water pollu- Happily, the six bills signed into law in ciency by California utilities in the early tion associated with electricity production. September by Governor Davis renew these 1990s reduced statewide electricity needs And once built, the renewable sources lock historic priorities. Supported by a broad by 10,000 megawatts (MW) compared to in a fixed price because they use no fuel. industry-utility-labor-environmental coali- what they would have been, and delivered tion mobilized by the Natural Resources tens of billions of dollars of economic bene- Myth #5: More power Defense Council and its friends, the pio- fits to Californians. If these cost-effective plants are the answer neering legislative package adds, among programs had been continued, the state Large, centralized power plants might be many other benefits, over $5 billion for would have sailed through this past part of the short-term solution, but are efficiency and clean-energy investments summer without a supply problem. And if likely to be poor investments in light of the during 2002–12. neighboring states had captured their effi- rapid technological transformation taking The solution to California’s electricity ciency opportunities too, they wouldn’t place in the industry. Decentralized ways supply problems cannot be found either in have depleted the regional power pool’s to make, save, and store electricity— simple-minded, muscle-bound approaches, reserves, thus causing the price volatility to microturbines, fuel cells, renewables—are or in government control of supply and which California, as the pool’s biggest net rapidly shifting the electricity industry demand in the marketplace. They lie in the importer, was most exposed. toward small-scale generating systems, dis- proper application of market principles that persed siting, and high-efficiency end use. reward economic efficiency and innova- Myth #4: New power plant The magnitude of the transformation of tion, while disposing of old, inefficient, and construction has stalled scale currently envisioned by many misguided notions about markets and con- because of restructuring industry leaders and made possible by new sumer behavior. In the meantime, we need Power plant construction in California and technologies is hard to overstate. Such to resist the temptation to latch onto quick the interconnected western power grid has changes will save customers tens of billions fixes that are out of step with market been continuing at a brisk pace despite of dollars in annual electricity costs, signifi- dynamics, today’s technology, and con- electric industry restructuring. During the cantly reduce pollution, and usher in sumer needs. 1990s, California added 6,048 MW of tremendous business opportunities for Thomas Feiler is the managing director supply—roughly the equivalent of six large companies at the forefront. of RMI’s Natural Capitalism Practice nuclear power plants. These “invisible” and a leading authority on the electric additions are what’s been keeping the power industry. lights on.

page 22 Fall/Winter 2000 CHINA LEADERSHIP continued from page 13 continued from page 15 said. “However, they are mobilizing to With electronics, satellites, and fast com- It was in the nature of things that the few start creating system solutions by puters at our command, we have all had access to key resources and the many addressing root causes.” watched the dwindling relevance of dis- did not: there never seemed to be enough One sign of a growing environmental tance in our intellectual pursuits. But to go around. The inherent characteristics awareness is that Chinese newspapers are we’ve also noticed that delivering facts and of physical resources made possible—per- devoting more space to environmental ideas—which can be done so efficiently haps even necessary—the development of problems. Another is that China has been from a distance—is only half of teaching- hierarchies of power based on control (of shutting down polluting small coal mines, learning dynamics. The other half is “get- new weapons, transport, trade, markets, cement works, oil refineries, steel factories, ting to know you, getting to know all and even of knowledge back when secrets and thermal power plants, despite about you”—the magical, social, human were sometimes secure), hierarchies of increasing demand for such products in the part of education. influence based on secrecy, hierarchies of country. Computer-assisted communication is not a class based on ownership, hierarchies of privilege based on early access to particular In light of all this, RMI has an opportunity substitute for face-to-face contact. But the pieces of land or especially valuable to make a difference in China, and this converse is equally true. Once I get to resources, and hierarchies of politics based past summer four staff members carried know you pretty well, up close and per- on geography. out exploratory work there. While the sonal, I really don’t need to see your face Lovinses participated as “internationally every time we talk on the phone or Each of these five bases for hierarchy and respected scholars” in the Shanghai sympo- exchange messages by email. discrimination has been crumbling in the sium, Alexis Karolides presented a work- What’s clear is that combining up-close waning years of the 20th century. The old shop on Natural Capitalism and green and distance learning enhances the educa- means of control are of dwindling efficacy. development in the northeastern city of tional experience, beyond what’s possible Secrets are harder and harder to keep (as Tianjin, and Huston Eubank served as the with either mode alone. the CIA and the White House seem to green-development representative on a relearn every month or two). And owner- TWILIGHT OF HIERARCHY team of American planners helping ship, early arrival, and geography are of develop a model rural sustainable village in A third example of the impact of the declining importance in accessing, remem- central China. informatization of society is the changing bering, analyzing, and using the knowl- seismology of organization and leadership. edge and wisdom that are the really Amory Lovins returned with a sense that valuable legal tender of our time. RMI will become increasingly active in The direction of change is now more than China. RMI’s work is considered transideo- obvious: everywhere, a shift from top- The twilight of hierarchy opens up a fast- logical, welcomed equally by the ruling down “vertical” relationships toward “hori- growing need for people who can and will Communist Party and the burgeoning capi- zontal,” consensual, collaborative modes of take the lead—and requires very different talist (“market socialist”) sector. bringing people together to make some- attitudes and strategies for those who opt thing different happen. to point the way. “We’re not viewed as a political trouble- maker, we’re offering them solutions to This major historical fault-line is also, very Harlan Cleveland is President Emeritus problems,” he noted. “They are above all clearly, a consequence of the spread of of the World Academy of Art and pragmatic. They want to know what information—symbols, not things—as the Science. He has served as a Marshall works, and they want to implement it newly dominant resource. The more Plan executive, a magazine editor and quickly. They are playing not just catch-up people are “in the know,” empowered by publisher, Assistant Secretary of State, but leapfrog.” ready access to the enormous pool of U.S. Ambassador to NATO, and a uni- knowledge available through the Internet versity president. This article was —Brent Gardner-Smith and global media, the more likely they are adapted from a speech delivered to the to think they have something relevant to Conference on Applied Brilliance in say—and insist on being heard. Dana Point, California on June 9, 2000.

page 23 Fall/Winter 2000 THE ROLE OF THE It may well turn out that the institutions GLOBALIZATION PRIVATE SECTOR with the greatest interest in promoting The second major gap in the current environmental or labor agendas are the continued from page 5 debate over globalization is that neither very companies that the demonstrators are those that practice Natural Capitalism are the protesters nor the parties to the global vilifying. If Natural Capitalism drives a re- in the vanguard of environmental restora- institutions are paying any attention to the evaluation of business as we know it, then tion, because they are be behaving as if positive, problem-solving role corporations the current conflict over trade, labor, and natural capital were properly valued. Some can play. the environment may become moot, as the are even restoring human community and economic interests of the corporations The protesters believe that the corporate culture as well by similarly respecting and begin to converge with the values of citi- sector is the problem, not the solution, and reinvesting in human capital. zens. Already a growing number of busi- must be regulated by government into nesses are declaring a commitment to It will be interesting to observe the reac- behavior that does not destroy the environ- operate sustainably—because it’s the right tion of the opponents of globalization to ment. This prejudice is a hallmark of the thing to do, or will buy them goodwill, or such companies. At present, protesters efforts to counter the negative effects of bring competitive advantage and profit, or challenge the right of businesses to amass globalization. It also limits the possibility of some combination of these reasons. undemocratic power, and are questioning dialogue, and leads many businesspeople generically the legitimacy of any large com- to suppose that the environment is a fringe In a perfect world, all corporate executives pany. If the Natural Capitalist thesis is cor- activity of enthusiasts who want to regu- would follow the lead of Ray Anderson of rect, however, we are in the early stages of late their activities and drive up their costs. Interface, Pasquale Pistorio of a new industrial revolution in which com- This erroneous view is reinforced by a cer- STMicroelectronics, and Mark Moody- petitive advantage will flow to those com- tain type of economic theorist (or environ- Stuart of Royal Dutch/Shell. These leaders panies that behave responsibly, not just mental activist) who thinks that are redefining their responsibilities to because they gain legitimacy and environmental protection extend far beyond enhancing shareholder brand equity, but because of the must be costly and value and the next quarter’s profits, to fundamental superiority of a painful, on the theory embrace stewardship for the world. Such business model based on that if it were easy it companies are embodying, clarifying, and radically higher resource would already have extending the principles of Natural productivity, closed been done by now. Capitalism as the new basis of profitability loop and non-toxic pro- in the decades to come. If, however, it is duction, the “Solutions true that adherence Until all companies follow their lead, how- Economy,” and rein- to the principles of ever, citizens will demand that “govern- vestment in natural cap- Natural Capitalism will ment” institutions ensure a level playing ital. be the basis of profitability field, with fair market mechanisms and Investors and consumers in the coming decades, then it is in busi- basic protections of human rights and the are beginning to scrutinize nesses’ own interest not to deplete their environment, so that all people can companies from this perspec- natural or human capital. Global corporate increase their prosperity. tive, and to reward the trans- power has some serious downsides, no What institutions can meet this demand? formational ones that are, in the doubt, but the best leaders of the transfor- What form of government can emerge to true spirit of capitalism, produc- mative corporate sector are inviting debate rival the strength of the market? This is at tively using and reinvesting in all over what their role should be and how core the debate about globalization—not four forms of capital. Those that to make their companies restorative of the details of trade, nor even the loss of practice the old industrial model— human and natural capital. They are local institutions and values, but how deci- recognizing only financial and physical realizing that corporations that do not sions will be made that affect what people capital while ignoring natural and steward and reinvest in their most truly value. human capital—will suffer and may fail. valuable resources will face a grim Clearly no one knows whether the nation- future. state will rise to this challenge, or some new form of governance will evolve.

page 24 Regardless, the influence of the business Businesses are starting to implement international treaties, and has its roots in community should be brought to bear to Natural Capitalism because it is profitable. the basic legal doctrine of negligence. It is hasten the transition to commerce based The international agencies that seek to also sane behavior for any species desiring on the principles of Natural Capitalism at enhance the ability of business to trade a lengthy tenure on this planet. every level, from local to national to should not ignore this trend. Unless they Finally, the multinational organizations global. expand their underlying ideology to give must implement transparent and demo- due weight to the values of human and THE ROLE OF cratic decision-making procedures. Any natural capital, they will weigh businesses GOVERNMENT unaccountable institution is by definition down with the ideology of the first indus- stupid, lacking feedback. Organizations There remains a vital role for governments trial revolution, which sought to substitute with great influence will receive feedback. and for civil society. It is important to plentiful, cheap natural resources for It is up to them to choose if they wish this remember that markets have purposes. scarce people. That made sense in the process to be orderly and informative or They also have limitations. Markets make 1700s, but at the turn of the new millen- disorderly and destructive. Any institution a splendid servant but a bad master and a nium, continued worse religion. A society that substitutes reliance on it will markets for politics, ethics, or faith is dan- only trap society in gerously adrift. Not all value can be mone- wasteful and eco- The WTO and the other boosters tized; not every priceless thing is priced. nomically inefficient Nor is accumulating money the same thing behavior. Even such of globalization must promote as creating wealth or improving people. powerful institu- trade only to the extent that it Many of the best things in life are not the tions as the multilat- business of business. And as the Russians erals must learn this embodies the principles of are finding under “gangster capitalism,” if they are to unless there are democratic ways to estab- endure. Natural Capitalism. lish and maintain a level playing field, only One of the easiest the most ruthless can conduct business. ways to begin this is It is imperative, therefore, that we all take for nations and the global institutions to with great power will gain and retain legit- greater responsibility in this debate. My place the various multilateral agreements imacy only if it is fair and accountable. The guess is that government will and should regarding human rights and the environ- greater the power, the more the citizenry trend toward stronger local control, where ment on an equal footing with trade priori- will insist on accountability. In the Internet agencies can understand and deal effec- ties. In effect, the WTO and the other Age, that insistence is no longer confined tively with most of the problems that face boosters of globalization must promote to traditional parliamentary democracies. us. For the increasing number of problems trade only to the extent that it embodies While some commentators say that global- that can be dealt with effectively only at the principles of Natural Capitalism; other- ization is not a new phenomenon, but the global level, new forms of governance wise they will continue to undermine the dates back to the advent of ocean steamers need to arise, including coalitions of com- very basis of prosperity and of life itself. and the early trading companies, what is panies, governments, and civil society, that Governments, multilaterals, and compa- sweeping the globe now is bringing both craft responses to such challenges as cli- nies should also embed the Precautionary opportunity and threat on an unprece- mate change or hunger. Principle in every decision-making frame- dented scale. That much is inevitable. However, any institutions that seek to sat- work. This principle, already supposedly What remains within our choice is isfy this public demand must ensure that adopted by the Organization for Economic whether we as citizens decide to manage all four of the engines of wealth creation Cooperation and Development and the these changes, and use them to enhance are enhanced: they must promote produc- European Union, has at its core the idea life, or whether we will leave those deci- tive use of and reinvestment in human and that action should be taken to prevent sions for others. natural capital as well as in financial and harm to the environment and human manufactured capital. health, even if scientific evidence is incon- Hunter Lovins is a co-founder of RMI clusive. It is already an element in many and serves as its co-CEO (Strategy).

page 25 Fall/Winter 2000 RMI BOARD RMISolutions RMI Solutions is published three times a year and distributed to more than 20,000 RMI Board Board readers in the United States and through- of Directors Spotlight: out the world. Please ask us before reproducing, with Ruth Salzman Adams Christine Loh attribution, material from this newsletter. Adam Albright Four RMI staff mem- Letters to the Robert A. Campbell bers traveled Editor Myron P. Curzan through Hong Kong We want to hear your comments, criti- recently to consult cism, or praise. Please address all corre- Michael Edesess, Chair on a variety of proj- spondence to: John C. Fox ects. Each came Editor Rocky Mountain Institute Christine Loh back with at least one common percep- 1739 Snowmass Creek Road Amory Lovins tion—that RMI Board member Christine Snowmass, CO 81654-9199 (970) 927-3851 Hunter Lovins Loh is a popular and influential figure in fax: (970) 927-3420 Hong Kong and that people there are Adele Simmons [email protected] buzzing about her effort to start a new www.rmi.org Joanna Underwood organization called Civic Exchange. The buzz has reached Business Week as well, About the Institute John B. Wing which profiled Loh in its July 24 issue and Rocky Mountain Institute is an entrepre- Board Emeriti noted that “hers is the voice of a new gen- neurial nonprofit organization that fosters eration in Hong Kong.” the efficient and restorative use of Irvin C. Bupp Loh recently stepped down from her posi- resources to create a more secure, pros- perous, and life-sustaining world. Dana Jackson tion in the Legislative Council, which helps govern Hong Kong. To many citizens Our staff show corporations, communi- James T. Mills there, it was a shocking announcement as ties, individuals, and governments how Carol Noyes Loh was the founder and leader of the to create more wealth and employment, Citizens’ Party. protect and enhance natural and human Michael Stranahan capital, increase profit and competitive “I am frustrated because the executive advantage, and enjoy many other bene- branch sees the legislature as an inconven- Special Advisors fits—largely by doing what they do more ience that has to be overcome, rather than efficiently. Peter Bradford as an active partner to build participatory governance,” she said when announcing Our work is independent, nonadversarial, David Brower her decision. and transideological, with a strong Dr. Jason Clay emphasis on market-based solutions. Loh, 44, is active in environmental affairs Founded in 1982, Rocky Mountain The Very Reverend in Hong Kong, having worked to protect Institute is a §501(c)(3) /509(a)(1) public James Parks Morton Victoria Harbour and to call the attention charity. It has a staff of approximately 45 of policymakers to the area’s air pollution. Robert Nagourney, MD full-time, 48 total. The Institute focuses Loh says her new effort will conduct policy its work in several main areas—business Jim Newcomb research and push for changes by influ- practices, climate, community economic Peter Schwartz encing lawmakers and other government development, energy, real-estate develop- officials. Bardyl Tirana ment, security, transportation, and water—and carries on international out- reach and technical-exchange programs. page 26 Fall/Winter 2000 INSTITUTE SUPPORTERS Our sincere appreciation is offered to these friends who have contributed to RMI between January 1 and August 31, 2000. Robert E. Corkran Anita Leick Numbers in parentheses indicate multiple Marie Costa & William Yon Regan The Leighty Foundation donations. Please let us know if your name Michael F.Cox, in fond memory of Ian Michael Leuck has been omitted or misspelled so it can be Alexander Vallance, beloved father, Joseph D. Maheady husband, & colleague corrected in the next issue. Robert L. Manning, in honor of Roy Ewen Coxworth Montague and Lynn & Don Padlo Cathryn & Thomas F.Crum GENERAL SUPPORT DONORS Kim Massie Photography James R. Custer, Jan & Robert A. Marker in memory of John Denver Brad McBain, Russell C. Jordan Jr. BENEFACTORS $10,000+ Richard DeBroux in memory of Marguerite McBain Amory Lovins Anonymous (3) Karen & Brian Dunbar Patricia B. McClearn Louise A. Maddux Enivonmental Trust John Allbar Trust Eric Enderton Phymien Meach & Michael Andrews Timothy H. McNerney & Compton Foundation, Inc. Richard Fagerstrom Betsy & Eric Mendelsohn Laura I. Mazza-McNerney The Concordia Foundation Steven Fedrizzi & United Technologies Linda & Jonathan A. Menkis The Energy Foundation The Alice P.and Ewan W. Fletcher L.Thomas Melly Foundation Cindy & Paul Miner Mary & John Frantz, Martha & Ralph E. Frede June & Richard L. Ottinger Jayne & Fred B. Mosher in memory of Margaret Frantz Karen Freedman & Roger E.Weisberg Nathan Ohrbach Foundation Mountain Sports Marketing Richard and Rhoda Goldman Fund Alison C. Fuller Agi & Henry P.Plenk John M. Mullen, Howard Heinz Endowments Sandra L. Gekler in memory of Benjamin M. Mullen John W. Pope Foundation William and Flora Hewlett Foundation Marian & A. Robert Gerecke Jr. F.Joseph Murphy Robert J. Schloss & Emily Sack The Home Depot Constance & Al Getman Daniel Nichols Seymour Schwartz The Roy A. Hunt Foundation Shirley & David M. Ginzberg Liliana Nikolich-Themelis & Silicon Graphics Inc. W.Alton Jones Foundation Jack W.L. Goering Nickolas J.Themelis Alice & Fred Stanback The Joyce Foundation Ted L. Goudvis Patricia & Paul O’Connor The William B.Wiener Jr. Foundation The Lifebridge Foundation, Inc. GraniteRock Abby & George D. O’Neill Betty Williams Joshua Mailman Catherine & Richard M. Gray Parish Fund of The Tides Foundation Sandler Family Supporting Foundation Greening America Mindy Parker SPONSORS $100 – $999 The Shell Foundation Sadja Greenwood Marilynn J. Patzwald & Anonymous (6) Sun Hill Foundation Katharine & Goodwin W. Harding, William C. Kostlevy Tara Fund Lorraine P.Anderson in memory of Philip & Anne Weld Judith & Terry R. Penney Town Creek Foundation Ariel Capital Management Inc. Mimi & W. Scott Harlan Susan S-H Phillips The Walton Family Foundation, Inc. Peggy Badenhausen & Thomas F.Kelly, Erica Heftmann & Thomas A. Kraemer Carol & William R. Price in honor of Adam French The Winslow Foundation Benita Helseth The Quaker Hill Foundation Edward M. Bakwin Anne Hillman & George E. Comstock Carol & J. Billie Ray Jr., in honor of BankBoston PATRONS $1,000 – $9,999 Alice Howard Mother Nature Teresa & Don K. Barth Anonymous (5) Hope Hughes Pressman Real Goods Franz Baumann The Airport Business Center Foundation James Hunt Joseph K. L. & Xiaomei Li Reckford Jeanie & Francis L. Bengtson, in honor Bank of America Foundation John Reed of the birthday of Anita Gambos Sue K. Jackson & Robert M.Tanabe Leslie & Rutgers Barclay Abigail Rome Maureen & Joe S. Benincasa Edythe Jarcho Peter Barnes & Leyna Bernstein Barnes Linda & Guy Rutland William & Margaret Berry William Joseph Will Berliner Beatrice Santorini John L. Boehne Mark Juedeman Sheila & Francois G. Brutsch Richard Kaplan Marnie C. Schaetti, Mr. & Mrs. James Bulkley in honor of Henry Branscombe Rev.& Mrs. C. Frederick Buechner Helen J. Kessler Mary & William P.Bundy Rita J. Schnipke Sandy & Albert Christensen William A. Kint, Judith A. Byrns & Joe L. Bergquist Marilyn & Michael G. Schooling Ferdinand Colloredo-Mansfeld in memory of Philip A. Kint Pamela & Ronald B. Castle, Elizabeth & Gary M. Schwarzman Maureen & Craig Combes in memory of Molly Stewart Alice Kleberg Reynolds Sherman Selden The Conservation and Research Ralph Cavanagh & Deborah Rhodes Lorene T.Kuimelis Foundation Frances Senska Ziska Childs Linda & Arie Kurtzig John B. Gilpin Fawn & John A. Shillinglaw Lisa Christenson Laurence LaFond Mark Gordon Charlotte Shoemaker Carole & Peter Clum Carolyn & C.T.Lange

page 27 Fall/Winter 2000 SKS Inc. Lisa Bianco Katrina Luise Everhart Kansas Building Science Institute Barbara & Marc Slovak Jocelyn & Ron G. Billingsley June & David L. Ewing Marion & Alexander G. Karczmar Robin Smith & Eric A. McCallum BIW Connector Systems Eberhard Faehnrich Karen & Bill Kaufmann, Steven J. Smith Mark Blandford Dorothy K. & John T.Fankhauser in honor of Ethel Lossing Barry D. Solomon John Bliese Ralph Faust Jr. Debbie & John Kennedy Jean Spicer Smith Esther & Francis L. Bligh Cliff Feigenbaum Michael Kenniston & Rosemary A. Di Nardo Laurie & Robert C. Stovall Jacqueline Bogard & Jim Bell Gerri Finkelstein Lurya & Joanne & Robert J. Kerr Etel & Joseph B.Thomas IV Stephen Bove Stephen D. Lurya Thomas E. Kimmel James H.Tolson Dorothy & Richard C. Bradley Harry S. Flamm Anne & Erik M. Kindblom United Way of King County Muriel Brainard David L. Fleener AIA Noreen Kinney David W.Vaughan Anne & David R. Brower Nancy Florence Philip W. Klein Heather & Gary L.Vaughn Lt. Col. & Mrs. Donald G. Browning W. Kent Ford III Steven Koep Paul Wack, in memory of John Denver Jan & William J. Bryan Ken Frankel Mr. & Mrs. E. L. Kopecky Tim Wake Elaine & Bruce W. Burley Lonnie Gamble Shellie Rae Kovaleski Florence & Franklin Wallin James F.Butler Gannett Foundation Inc. Sabra Kranzfelder Driscoll Allene Walters Beverly A. Campbell Genet Garamendi & Martin Kurtovich Mary Rose Krygsman-Sinkin & Bonnie Waninger & Steven C. Smith Bonnie Anne Campbell & Peter B. Cook Mr. & Mrs. George G. Gardner Lanny Alan Sinkin Hal Weckler, in honor of Ellen Weckler Kathryn & Jefferson Carleton Peter Geiger Gloria Kuang-Jung Margaret & William E.Westerbeck Center for Permaculture as Native Sophia W. Gillmann & Theo Wang David Lamb Effie E.Westervelt Science Susan J. & Edward K. Goodhue Colette M. Lee Mary-Alice White Peter Chapman Peter A. Greenberg David B. Lehr Judson V.Wilder Jr, Victoria & John F.Clancy Marji Greenhut Nell F.LePla in memory of Eulala Faddis Suzanne Clare Carol & Richard B. Greenwood Elizabeth A. Littler E.Williamson Casey Coates Danson Julie & Roger Grette Ingrid A. Louiselle Lisa Winters, Winifred & Jack M. Colwill M.D. Elizabeth E. Grindlay Margaret & Daniel S. Lynch in memory of Cecil and Elva Butcher Sally & Joseph Conklin Mary Joslyn Gurley Michael L. MacDonald Herbert R.Wiser Judy Bruce & Erin Connery Phyllis & Arvid Hagen Hedy & Robert E. Marcotte Barbara Zinn Tim Conroy Eldon Haines & Linda Rose David A. Martens Shawn L. Considine, Sarah Hammer & Haberl Jeff S. Haberl Kathryn Martin & Franc Sloan ASSOCIATES $1 – $99 in honor of Thomas D. Harley Marie & J. Samuel Hammond Marcia & Stephen P.Martinson Anonymous (32) Consolidated Manufacturing Inc. Christine & John Hamrick Brian Maurizi John Accardi & Nancy Clarke Marcia Corbin Shawn & William Harris Richard McAnany II Peter Adams Mirjana & L. H. Cornelius K. Charles Hartranft Olga & Frank McCoy Barbara Alter Arlan Crane John B. Hassett Jacqueline McLaughlin Gouse & Danelle Ann Ardell & Neal R. Kushner Mary Dale & James E. Deacon Mary Kimberly Hayes & Neil L. Rettig S.William Gouse Jr Scott Armstrong Jim DeCecco Chris Herman Robert S. Means Marilyn L.Arnold Jeanne Deignan Kosmides & Jane & H. D. Hickman George Kosmides John E. Menger Jim Arnold Jr. James J. Higgins Jon Dember Susan E. Merrill Chris Leary AIA Christine A.Asher Thomas E. Hitchins AIA John C. Dernbach Microsoft Corporation Patty Atkins & Tom Brightman Bud Hoekstra Mike Derzon Elizabeth & James Mijanovich Jennifer Atlee Molly Hollar Grace Donovan Peirce & Cameron Miller, in honor of David Suzuki Chad Bailey, Holocon Inc. in honor of Richard R. Bailey Herbert R. Peirce III Clare F.Moorhead Donna E. House William M. Baldwin Phyllis & Roger L. Duba Frank A. Moretti Miriam Huelsmann Victoria Balkoski & Paul Winkeller Marjorie Thompson Duck Gaard Moses Dr. & Mrs. Kenneth A. Jacobson Brenda Balletto-Ferris Andrew Dumitru Tatyana & Milton Moss Laura B. Jaffee & Alfred Saunders D.T.Durnell & Susan Kerns Durnell Richard Murray K.Timothy Barry Jaffee William W. Durrell David & Franchesca Napier Christine A. Barsanti & Jim Gado Donna & Jeffrey A. Jaffee George Ehrhardt National Renewable Energy Lab J.A. Basson Jane & William S. Jennings Carole & Stephen L. Eittreim Nelson B. Nave AIA Jean L. Bell & Dwight Souder Martha & Harry C. Johnson John M. Ely Jr. Herminia & Thomas R. Neet Jr. Kurt G. Benedict Merrill E. Jones Brent Eubanks Louise & Erik K. Nelson Hilary & Charles G. Bentley Dana Judy & Susan A.Weisner Alice Evans Jacqueline A. Neurauter J.W. Bernsee Charles R. Kane III

page 28 Emily & John W. Newton Aileen Safford C. Kenneth Whitley Daniel Nichols Shirley & Richard M. Salvetta Margot & Scott D.Wilcox SECURING THE Kim G. Noble W. Ralph Schaefer Joanne J.Williams FUTURE DONORS William S. O’Donnell Jr. Karen Schmidt Kris & H. B.Williams Ruthanne & William E. O’Neill Joyce & David L. Schmoeger Patricia A.Wilson FRIENDS $100–$499 Christopher O’Rourke Mr. & Mrs. John Schukman Lynn T & Joan Lee Winter Markell Brooks Naomi & Eric J. Olson Grace & Cyril J. Scripps Wayne Cogswell & Joanne Hay We also want to thank Patricia Olson James F.Senn & Rosemary Cseh-Senn Hensley & James D. Peterson Kradan & Kent Ostby Dr. & Mrs. Edward M. Shepard those individuals who have contributed to RMI Jill W. Over & Tom Mitchell Noam Shore ASSOCIATES $1-$99 through Earth Share, the Robert H. Palrud Marcia Shull Anonymous Donn R. Parsons Bernece & Marvin L. Simon Combined Federal Allison & Sean Archambault Bev Payne Sidney H. Simon Campaign, and other William D. Blaney C. Mary & Ivan Perisic Leigh Sims workplace charitable pro- Julia & Jack Burgen, Alison G. Peters Sioux Falls Rural Initiative Center grams. If you would like to in memory of John Denver Donald H. Peterson Eric Parkman Smith have RMI as a charitable Kim & Marshall Evans (3) Elsie & Charles C. Petty David A. Soergel option in your workplace Rhea & Larry Estes Ernest F.Pieper Gail & Gregory C. Speer campaign, please contact Barbara J. Hibbard Elaine & Steve Pike Sue & Edwin G. Speir RMI’s Development Kate & Geir Jordahl Richard F.Plage Dorothy & Clarence Stearns department. Kristin & Craig S. Laughlin Steven R. Plotnick Victoria Stevens & Alan R. Drengson Margaret & Daniel S. Lynch Donna Power Michael Stewart Robert T.Reed Ann & David N. Prugh Linda & John Stoddart Christopher R. Purvis Sally & John T.Sullivan Frances & Albert Raboff Carole Tashel Red Star Engineering Susan K.Taylor SPONSORS OF THE ERIC KONHEIM FELLOWSHIP John R. Reed Gervas S.Taylor Jr, in memory of Virgina UND IN MEMORY OF RIC ONHEIM Gwenyth & William D. Reid Elliot Taylor (12/30/21–12/20/99) F , E K Colleen Reilly Richard D.Thayer Acquidata Inc. Robert L. Lenzner David M. Rich United Way of King County Tina J. Ball Cynthia R. Lewis David Rindlaub Eric & Cora Ustaris Deborah Bershad Nora Lobosco Dodge & Richard Riseling Judith & Terry R.Valen Stephen W. Biegel Geoffrey A. Dodge Robin & David S. Rittenhouse Nancy & Tom Vineski Daryl P.Bowman Mareik Inc. Sandra Roberts & David Rhoads William Von Lackum II Jean Carlton Parker Robert and Joyce Menschel Family Foundation William J. Robinson Ruth Shanti Wagner Lina & Aron Castro Allen J. Noveck Jill Robinson Lisa & John L.Wallace Todd Ciaravino Patricia & John Olds Rockett Agrarian James L.Wallace Mr. and Mrs. Daniel W. Cook III Dorothy R. Pace Jill Rosenblum Douglas P.Walter Sandra & G. Edward Dodge Dale L. Ponikvar Yvonne & Stephen T.Ross Laurie Turrell Ward Jaren & Bruce Ducker Bernard G. Post Monica L. Russell George Washburn Lynn Eaton Jackson & Kirkman Jackson Powers Global Strategies LLC H. John Russell Barbara Wertz-Leiden & Roger Ferris + Partners LLC Charles W. Leiden Kelli & Allen Questrom Ann & Loren L. Saari Honey S. Fishman Jean & Dan I. Rather FredSimon & Company Ltd Regele Builders Inc. Jennifer & P.M.Gibbons FREQUENT GIVERS Estelle & Steven J. Rose, in memory of Kathy & Robert H. Gurland Eric & in honor of Bud Konheim’s Stephen P.Hanson Paul Bartch (2) Marjorie & Brian Gaffikin (2) 65th birthday Carol Judelson, in memory of Eric & Laura & Joseph Bianchi (2) Gap, Inc. (2) Elisabeth Scharlatt-Gottlieb & in honor of Bud Konheim’s special Paul Gottlieb Earth Share (7) Rafeal Gonzalez-Vizoso MD (7) birthday Elyssa & Jack Schecter Lois-Ellin Datta (3) Charles Jaffee & Marvina Lepianka (2) Jane & Joseph Kasov Carol & Ted Shen Donors of GiveForChange and Darla M.Tupper (2) Barbara Kolb & Seymour August UNITE! eGrants.Org Anna Ruthe Tyson (2) Bud & Colleen Konheim Martin I.Vahtra Barbara & Peter B. Fleming (8), Carolyn Konheim & Brian Ketchum in memory of John Denver Catherine Viscardi Johnston Christyne F.Lategano Nick S. Nicholas

page 29 Fall/Winter 2000 JoAnn Simms, in memory of John Denver WINDSTAR LAND CONSERVANCY DONORS Melissa Stegeman-Roberts & Rick E. Roberts, in memory of John Denver BENEFACTORS $10,000+ Barbara E. Brayton, Sandra L.Wayne Ann E. Zahn, in memory of John Denver Rocky Mountain Elk Foundation in memory of Robert Jay Brayton Diane & Frank J. Busateri Jr. (8) PATRONS $1,000–$2,499 Barbara S. Day, in memory of John Denver Environment Foundation Carol, John & Johnny Demetrio, in memory of John Denver SPONSORS $500–$999 Thelma & Jack B. Estep, Betty,Tom & Justin K.Wagner in memory of David Tice Iris Feldman, in memory of John Denver FRIENDS $100–$499 Verena Frei Bishop & Gene Bishop, Amgen Foundation in memory of John Denver William C. Ball Donna R. Fry,in memory of John Denver Jonnie Ann & Jack Bentley Laura Gardner Ellen Bigelow, Alexandria Gelencser, in memory of John Denver in memory of John Denver Kathryn Carr Sue & Terry E. Getz, Hollie K. Carter, in memory of John Denver in memory of John Denver Patricia & Larry K. Good, Holly & James Clifford Jr., in memory of John Denver in memory of John Denver Ron Harbeson, Windstar’s New Whale Suzanne E. Cole-Rice & Robert T.Rice, in memory of John Denver One of the Windstar Land Conservancy’s trademark in memory of John Denver Cathryn M. Harrison, Mr. & Mrs. Cotnoir, in memory of John in memory of John Denver images is a whale sculpture encircled by an open geo- Denver and his fine work Kathy & Kurt R. Heilmann, desic dome erected in the early 1980s by the Windstar Gail & Gerald Cullinan, in memory of John Denver Foundation. in memory of John Denver Charlotte A. Hernandez, This year,Windstar members Greg and Susan Gilles of Conrad M. Dahl, in memory of John Denver Whidby Island, Washington spearheaded a project to in memory of John Denver Vicky J. Huerth, replace both the dome and the sculpture. With Dexter Barbara & Peter B. Fleming (2), in memory of John Denver Lewis and Scott Bergman, they cut structural mem- in memory of John Denver Bob & Sara Keckeisen (2), bers for a new dome based on the original Carolyn Hayden, in celebration of the life and in Buckminster Fuller design and Lewis carved a new memory of John Denver in memory of John Denver whale sculpture from a massive piece of driftwood Cheryl W. Kirksey, Lynni Hutton, in memory of John Denver found on a nearby beach. in memory of John Denver It’s About Time Fan Club, On Memorial Day weekend, 30 volunteers helped in memory of John Denver Nelly & Craig S. Klein, assemble the new dome, dedicate the new whale The Leighty Foundation in memory of John Denver Connie Kobs carving, and place a time capsule to be opened in 50 Joy C. Mayfield, years. in memory of John Denver Wanda & Edward T.Kollar Susan S. McKibbin Katrina Lichtenfels, SPONSORS OF THE DAVID TICE FELLOWSHIP in memory of John Denver Shannon & Gary Mueller, in memory of FUND, IN MEMORY OF DAVID TICE John Denver, his vision and his desire Leslie Martel Baer & Matthew Lee to make a difference. Arnold, in memory of John Denver Dan Bakal Margaret & Jeffrey A. Kellam Judy Pollock & Steve Walker (2), Patricia Miller, Charlotte D. Buttrick Leslie A. Kelley in memory of John Denver in memory of John Denver Cindy & Peter D. Curran, in memory of Christopher D. Kelsey Jen Seal Uncapher & Bonny Seal, Dominique & Kenneth Mintz, David & in honor of Diane Batty’s Anna L. Lawson in memory of William Vincent Seal in memory of John Denver birthday Carolyn Leaman McNabney & Maria C. Silva, Martha & Bruce D. Morgan, Carol Esford Nellie R. Leaman in memory of John Denver in memory of John Denver Edra & Delbert L. Estes Janet L. Parsons, Jan & Marty Morris Exxon Annuitant Club of Central Florida ASSOCIATES $1–$99 in memory of John Denver Joan & Henk W. Rauwerdink Mr. & Mrs. S.B. Famous Jr. Silver Clouds Chorus Grace & Bryan T.Bailey (15), Dolores & Chuck S. Parsons, in memory of John Denver in memory of John Denver Brenda & Robert A. Grover, in memory of Silver Clouds Orchestra Devota & Phillip K. Sheffield, David & in honor of Diane Batty’s St. Cloud First United Methodist Church Pamela L. Bio, birthday in memory of John Denver in memory of John Denver Choir W.Alton Jones Foundation

page 30 CANADIAN STRATEGIC INFLUENCE Changing the Rules By Changing Minds

ANA MEADOWS, CO-AUTHOR OF shape to his or her political and economic The next day, Martin gave a speech that Beyond the Limits and a long- situation. caught the attention of many for its Dtime friend of RMI, likes to Lovins and other RMItes are finding that emphasis on environmental themes. hand out a one-page sheet titled “Places to the concept of Natural Capitalism is politi- A newspaper story in the June 19 Ottawa Intervene in a System.” Based on her cally effective because it speaks to a wide Citizen on Anderson’s policies reported many years’ studying the behavior of com- range of conditions and experiences. that Anderson “has a powerful ally in plex systems, it’s a list of eight approaches Finance Minister Paul Martin, the one- to creating societal change, ranked in time opposition environment critic. order of influence. “Mr. Anderson and Mr. Martin recently Interestingly, the techniques many had dinner with Amory Lovins, co-author activists emphasize—government regula- of Natural Capitalism, a book that tions, tax rates, and so on—rank near the describes the ‘new industrialism’ that is bottom. Tops on the list? Changing “the more efficient, profitable and environmen- paradigm of the people who have power tally friendly. over the rules.” Change the way those key “Mr. Martin, in a recent speech, picked up decision-makers think, and they’ll change on the book’s theme: ‘If we are to move everything else. That’s where the greatest forward toward our goal of sustainable leverage lies. communities, we must be willing to To that end, RMI staffers spend a great accept a new approach, one in which eco- deal of time focusing on what we call nomic and environmental considerations strategic influence—”influencing the influ- Canadian Finance Minister, are no longer viewed as separate entities.’ ential” by creating and exploiting “teach- Paul Martin “Mr. Martin says Canada needs to use able moments.” Here’s an example from Canada, where renewable energy like biomass fuels, solar Lovins has been working on energy issues What are the keys to a successful effort? and wind power on an industrial scale for three decades. “Access, message, and delivery,” says while abandoning ‘the very concept of RMI’s Amory Lovins. “First of all, you’ve On a recent visit, Lovins dined with waste. The traditional model takes in got to get their attention. Almost always, Finance Minister Paul Martin and virgin materials at one end, creates waste that means going to them—preferably at Environment Minister David Anderson. and emissions during production, and their invitation—and working with them “They seemed taken with the ideas of throws away potentially valuable materials in their office, on their turf.” Natural Capitalism,” he says. “They after consumer use,’ he says, sounding Ironically, sometimes the higher up the understood the benefits of advanced more like an environmentalist than a organization, the more eager the set of resource efficiency and they could easily finance minister.” see principle three—selling services as ears. “Heads of state seem starved for That last phrase is music to Lovins’s ears. opposed to producing goods—being information,” says Lovins. “They are often “A message like that always carries more applied to a primary resource economy held in an inner ring by senior advisors.” weight when it comes from the finance like Canada’s. I asked, ‘Do you want to But what happens once you’re in the minister, especially to the business com- sell tons of stuff, so efficiency cuts your door? munity,” he says. “It can lead to a change revenues, or services, so it cuts your in tax and fiscal policy, which can influ- “You have to address their problems,” costs?’ There are examples of how they ence business. It can create a level playing notes Lovins. Rather than lecturing, he could sell services in both the forestry and field for investment in resource efficiency.” recommends respectfully suggesting solu- mining sectors.” tions that the decision-maker can use to —Brent Gardner-Smith

page 31 Fall/Winter 2000 Rocky Mountain Institute/ volume xvi #2/Fall/Winter 20002000 RMISolutions newsletter IN THIS ISSUE: ■ ENERGY: China: Overcoming Coal ■ CLIMATE: Australia’s Climate Challenge ■ NATURAL CAPITALISM: The Impact of Globalization ■ Strategic Influence in Canada ■ Nat Cap in Cleveland ■ GUEST COLUMN: Leadership for the Global Century ■ PERSPECTIVES: What’s Possible May Not Be Wise ■ ASK ROCKY: Alcoholic Cars, Houseboat Power ■ HOT SEAT: Faceoff on Energy & Climate Claims ■ RMI NEWS: Goats, Kids, and Greener Pastures ■ What Are You Reading? ■ Life at RMI

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Fall/Winter 2000