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Part I
A Whole System Approach
to Factor Five
The Natural Edge Project
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Preface to the Sector Studies
The Natural Edge Project
The coming decades will see the most pressing and widespread imperative for change that our species has ever experienced. Since the early times, much of our history has been a story of survival â a story that tells of a vulnerable but clever species that rose to the top of its planetâs food chain, and achieved, for some, staggering levels of affluence and luxury â a story however that is already taking a turn for the worse, and may again call for us to fight for our very own survival. The awful consequence of the rapid industrialization of much of the world is that it has relied on significant levels of pollution, environmental damage and resource consumption, the impact of which is now rivalling the planetâs ability to accommodate it. The next chapter of civilizationâs history will be dictated by the manner in which we respond to the realization that as a global community we need to significantly and rapidly reduce our pressure on the environment, and in particular our generation of greenhouse gas emissions â a challenge made particularly difficult by the 2008 global financial crisis.
The realization that underpins the message of this book is that over the coming decades we need to implement a range of solutions across the world in a way that enables the global economy to grow out of the current economic crisis, while creating a strong and sustainable economic platform for the future. The reality is that even though the financial crisis is severe, concerted government action can help business and the financial markets recover in a matter of a few years. However, climate change is long term, and if not addressed will lead to devastating impacts on the environment and on the global economy. To put this into perspective, consider that the global financial crisis has been estimated to result in the world economy reducing by around 7 per cent in the year 2009, resulting in a net GDP growth of minus 1.3 per cent â the global economyâs worst performance in more than 60 years.1 This is indeed a significant impact; however, after reviewing the economics of climate change, Sir Nicholas Stern came to the conclusion that if action is not taken, the economic impacts associated with climate change would reduce the global GDP by between 5 and 20 per cent each year.2 In effect this would not only repeat the devastation of the 2008 financial crisis every year, but the crisis would worsen as environmental feedbacks compound. Allowing this to happen would be catastrophic and would surely crash the global economy. On the other hand Stern estimates that a concerted effort to stabilize greenhouse gas emissions at an acceptable level would require a mere 1 per cent of global GDP per year, a small price to pay to secure our common future.
Most experts now agree that the most cost effective and quickest way to reduce greenhouse gas emissions is through a focus on rapidly improving resource productivity and switching to more sensible methods of production; however, such a focus will require a whole-of-society approach. Governments will need to revise related policies, business and industry will need to carefully reassess operations, the professions will need to rapidly renew their curriculum and practice,3 research organizations will need to further clarify and solidify the issues and opportunities, citizens will need to revise purchase choices, and so on. In 1997 a book called Factor Four was written to assist in such changes. In a collaboration between the Founder and then President of the Wuppertal Institute for Climate, Environment and Energy in Germany, Professor Ernst von Weizsäcker, and the Founders and Principals of Rocky Mountain Institute in the United States, Amory Lovins and Hunter Lovins, the book presented evidence for the first time to show that significant reductions in the consumption of energy and water, and hence reductions in environmental pressures, could be profitably achieved across our societies. The book quickly became an international bestseller and was translated into 12 languages, and to this day is widely recognized as one of the most influential books in the field of sustainable development. As groundbreaking as the message of Factor Four was in 1997, more than a decade later, as the world realizes the severity of the âclimate crisisâ, its message has now become critical â a message this book seeks to update.
The time for delay is over. The time for denial is over. We all believe what the scientists have been saying on climate change for many years now. I think what is exciting about the conversation is that it is not only a problem but it is also an opportunity. As we have started to develop a framework for our economic recovery plan ⌠we have an opportunity now to create jobs all across this country in all 50 states to repower America, to redesign how we use energy and think about how we can increase energy efficiency to make our economy stronger, make us more safe, reduce our dependence on foreign oil and make us competitive for decades to come â even as we save the planet. We are not going to miss this opportunity.
President Elect Barack Obama, December 20084
Although it would be easy to think that our efforts canât make a difference, since Factor Four was published numerous teams of innovative thinkers, designers, policy makers and practitioners around the world have been diligently working to create truly outstanding solutions, that when brought together will contribute to a sustainable world. The purpose of this sequel to Factor Four is to profile and explain the significance of such efforts in a simple to understand but rigorous and thorough way. Developed in two distinct parts, the first part presents a whole system approach to achieving up to 80 per cent resource productivity improvements across the major energy- and water-intensive industries (namely buildings, industry, agriculture and transportation). The second part then presents reflections from many years of experience and expertise by Ernst von Weizsäcker in preparing governments and industry for a rapid transition to such improvements. The second part of the book covers topics including the effectiveness of regulation, economic instruments and taxation reform, overcoming the rebound effect, balancing private and public goods, and the relevance of a focus on sufficiency in a civilized modern world.
However, before we present this important material we take a moment to explain how our team came to collaborate with Professor von Weizsäcker on this important publication. Ironically the journey began with Factor Four, as this was the book that brought our group of young engineers and scientists together to form The Natural Edge Project (TNEP), back in 2002. At a time when we were becoming dismayed by the worldâs unsustainable development path and felt like there was little we could do to change the situation, Factor Four showed our team that much of what we understood about our professions was set to be revolutionized. Following this realization, our team asked, âhow can we contribute?â, and we realized that the first step was to learn all we could about the field and then focus our efforts on truly making a contribution.
Reading books like Natural Capitalism and Cradle to Cradle, it became clear to us that these changes, as part of the so-called ânext Industrial Revolutionâ, would require a scale and pace of creativity and innovation even greater than responding to the creation of electricity, keeping up with the space race or even the revolution of the digital age. Like so many young engineers and scientists concerned about the future, we were aware that there was growing activity in innovating sustainable solutions, but until we read these books (which did not appear in our undergraduate curriculum at the time) we had no idea that such opportunities existed throughout the whole economy, and when combined could actually make a significant difference. Effectively, reading the work of these leaders transformed our growing fears and anxieties about the future into a strong focused drive to contribute to changing it, leading to the formation of TNEP. Once on this path our sense of hope and excitement grew as we contemplated a future that saw the societies of the world truly harnessing 300 years of industrialization to create a low-impact existence that could sustain life as we know it.
Our first project was a three-year process, working with many coauthors, mentors and ad...
