Dollee sozaRocky Mountain Institute

Natural Capitalism

Rocky Mountain InstituteKansas State UniversityJanuary 4, 2010

CAPITALISM:The productive use of and reinvestment in capital.

But what is capital?Moneyfinancial capitalGoodsphysical or manufactured capital: buildings and equipmentPeoplehuman capital: culture and communityNaturenatural capital: natural resources and ecosystem services

Water and Nutrient CyclingAtmospheric and Ecological StabilityPollination and BiodiversityTopsoil and Biological ProductivityAssimilation and Detoxification of Societys WastesWithout natural capital there is no life and therefore no economic activity

Valuing Nature: Insurance Example

Biosphere IISpace $200,000,000 andno air

First Industrial RevolutionResult: productivity increase of 100XTheory: People are scarce and nature is abundant increase labor productivity.

Next Industrial RevolutionPeople are abundant and nature is scarce increase resource productivity.

The limits to future profits arefishnot boats

Next Industrial Revolutionfrom each unit of resources.4X, 10X, even 100Xas much benefit

Edwin LandPeople who seem to have had a new idea have often just stopped having an old idea

Four principles of natural capitalismP1: Radically increase resource productivityP2: Biomimicry: closed loops, no waste, no toxicity P3: Shift to a solutions based economy: from product to serviceP4: Reinvest in natural and human capital

P1: Radically increase resource productivityDo more, better,with less, for longer

What is radical resource efficiency?Save 25,000,000 gallons per year at a manufacturing plant

Increasing pumping efficiency of an industrial pumping loop from 95 to 7 hp

Achieving a 29% reduction in electricity consumption (at equal production), a 45% drop in water usage, and a 29% decrease in the emission of greenhouse gases.

Natural Capitalism: Radically Increase Resource ProductivityRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgOld design mentalityOptimize each part in isolation(which pessimizes the system)

Edwin LandInvention is a sudden cessation of stupidity

Natural Capitalism: Radically Increase Resource ProductivityRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgNew design mentalityAn example: Redesigning a standard (supposedly optimized)industrial pumping loop cut power from 95 to 7 hp (92%), cost less to build, and worked better.

Natural Capitalism: Radically Increase Resource ProductivityRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgNo new technologies, just two design changes

Big pipes, small pumps (not the opposite)Lay out the pipes first, then the equipment (not the reverse)

Optimize the WHOLE system, and for multiple benefits

Once youve minimized flow, next minimize piping friction1%Boolean pipe layout99%

Natural Capitalism: Radically Increase Resource ProductivityRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgOld design mentality

Natural Capitalism: Radically Increase Resource ProductivityRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgNew design mentality

Natural Capitalism: Radically Increase Resource ProductivityRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgRocky Mountain Institute experimental house & officeGrow bananas with no furnace at 40F

Compounding lossesor savingsso start at the downstream endEnd-use approach for system design

P2: BiomimicryClosed loops, no waste,no toxicityNature as model, measure, and mentor

Nature as mentorspider silk

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgThree levels of biomimicryProcess:How is it made?

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgDesignTexUpholstery edge trimmings:toxic wasteOf 8,000 tested, only 38 cloth treatment chemicals were non-toxic

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgDesignTexNatural cloth treated with the safe chemicals looked and felt better, lasted longer, and cost less

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgDesignTexSwiss environmental inspectors found:

effluent water was cleaner than the Swiss drinking water going in

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgThree levels of biomimicryDesign:How does it work?

Design: How does it work?How does nature stay cool?

Termite mounds

Low energy-intensivematerials

Passive air conditioning Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgAfrica, Australia, and the Amazon

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgHarare, ZimbabweEastgate

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgThree levels of biomimicrySystem:How does it fit?

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgCity of KalundborgStatoil RefineryNovo NordiskAsnaes Power PlantGyprocKalundborg, Denmark

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgCity of KalundborgStatoil RefineryNovo NordiskAsnaes Power PlantGyprocKalundborg, DenmarkFuel Gas

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgCity of KalundborgStatoil RefineryNovo NordiskAsnaes Power PlantGyprocSteamSteamKalundborg, DenmarkWaste heatFuel Gas

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgCity of KalundborgStatoil RefineryAsnaes Power PlantGyprocWaste heatLake TissoWaste heat(salt water)Fish farmsFly ashKalundborg, DenmarkNovo NordiskFuel Gas

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgCity of KalundborgStatoil RefineryAsnaes Power PlantGyprocWaste heatLake TissoWaste heatFish farmsRoadsFarmsSludge for FertilizerFly ashKalundborg, DenmarkNovo NordiskFuel Gas

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgCity of KalundborgStatoil RefineryAsnaes Power PlantGyprocFly ashWaste heatLake TissoWaste heatFish farmsRoadsFarmsScrubber sludgeFish wasteKemira Acid PlantSulphurNovo NordiskFuel GasGypsumYeast for pigsKalundorg,Denmark

Natural Capitalism: BiomimicryRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgKalundborg, DenmarkAnnual savings: $1215 M USD30,000 tons of coal19,000 tons oil600,000 cubic meters of water

P3: Shift to asolutions economyFrom product to serviceWhat are customers trying to solve?Less stuff more service

Hot showers and cold beer

Natural Capitalism: Shifting to a Solutions EconomyRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgEnd-use, least-cost analysisFrom: Supply-side focus: How to get more resources?

To: Demand-side focus: Whats the least expensive, least polluting way to deliver those services?

Natural Capitalism: Shifting to a Solutions EconomyRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgXerox Capitalized on existing leasing programs to build a take-back infrastructure & a document services business

Natural Capitalism: Shifting to a Solutions EconomyRocky Mountain Institute (RMI) Research & Consulting www.rmi.orgXeroxEverything that Xerox delivers to its customers is designed to be returned -- whether its a machine, a cartridge, a spare, or packaging. All of these items, once returned, are processed for reuse or recycling. The only thing we want to leave with our customers is - THE DOCUMENT.

* Xerox Corporation, the Environmental Call: What on Earth Are We Doing for Customers? Xerox Environment, Health and Safety, 1997

P4: Reinvest innatural and human capitalProtect, enhance, restore and let nature renew

New York City needed to upgrade its drinking water system

New water filtration plant @ $4-$6 billion + $300-$500 million/year formaintenance

NYC invested in the integrity of the watershed - Purchased land as buffers - Helped farmers reduce discharge - Upgraded local sewage treatment plants Cost = $1.7 billion Instead

Whats stopping us? Short term financial pressures Accounting practices Purchasing practices Design and engineering practices Measurement systems Reward and recognition programsWe can create a new future, a new vision

Private-sector leadershipOver half the worlds 100 largest economic entities today are not nation-states but corporations

The business community may be the only institution that has the resources, skills, and motivation to solve these tough problems.

Archetype for the emerging worldNatural-capitalist businesses take their values from their customers, their designs from nature, and their discipline from the marketplace.

www.rmi.orgWhatever you can do, or dream that you can do, begin it. Boldness has genius, power and magic in it. Begin it now.