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New Bottom Line Volume 3.10 – Free Trade, "Negastuff" and Sustainable Economies

May 30, 1994

There was an unspoken message underlying last year’s debate in the US over NAFTA, the North American Free Trade Agreement–and it pre-figures the coming debate over the Global Agreement on Tariffs and Trade (GATT). The subtext was there with every speaker, rarely spoken yet always implied: free trade and the “global economy” will let us all prosper by making more stuff, selling more stuff, moving more stuff around the surface of the planet. It’s reminiscent of comedian George Carlin’s legendary routine about “stuff”–except it’s not funny.

The devil’s bargain in these treaties goes beyond the debate over job impacts, beyond their sacrifice of hard-won national environmental and consumer protection standards before the “lowest common denominator” of unrestrained free trade, beyond their weakening of democracy by yielding sovereignty to appointed trade tribunals. The truth is that all these profound and arguably dangerous changes support a fools’ quest, because the “prosperity equals growth equals prosperity” catechism presumes infinite economic growth in a finite physical biosphere. This belief system is so deeply and universally rooted that even Vice President Al Gore, who has shown a profound understanding of environmental issues, couldn’t bring himself to confront it during the 1992 campaign.

Yet economic activity is essential to meet human needs, both for necessary goods and services and for equally necessary remunerative (and maybe even meaningful) work. We are perched, then, on the horns of a dilemma. We may also be poised for social and economic innovation.

Some simple arithmetic makes the dilemma clear. The US, with 4% of the world’s population, uses 25% to 40% of the annual consumption of many of the world’s resources. If China were to develop, with present technologies, to just one-fourth the US standard of living, China itself would match US consumption. If the rest of the world were to rise to the US standard of living, global resource demand and environmental burdens would increase six to ten times–unless we find another way.

There is a warning here for both developed and developing countries–and an opportunity. Developing countries will develop, but must “leapfrog” over the OECD nations, pegging their development not on matching the West’s technological sophistication, but transcending it–focusing on efficiency and dematerialization, on benefits delivered rather than on “stuff” moved around.

But in addition to these technological choices, we will need to invent new forms of business that can make more money by making less “stuff”.

Physicist Amory Lovins coined the term “negawatts” when he proposed that electrical utilities were not in the business of selling electricity and gas, not even in the business of selling light and heat, but of selling environmental conditions — comfort, brightness, etc. The electricity is just a means to an end. The utilities could in effect provide the same conditions by investing in efficiency improvements–like home insulation and more efficient lighting. By rolling those investments into their regulated rate base, they now profit from selling “negawatts”–the absence of electricity–instead of megawatts.

The challenge, then, is creating analogs in other sectors of this amazing invention–creating ways to profit from selling “nega-stuff.” Former Smith & Hawken CEO Paul Hawken writes of a salmon “utility” that would link the economic lives and resource management strategies of salmon fisheries and logging companies–increasing sustainability of resources and employment in both industries. A company in Amsterdam experimented some years ago with an automobile “utility” that could preserve individual mobility while greatly reducing urban congestion.

We are likely to see more of these innovations as consumers, businesses, advocacy organizations and governments grapple with the challenge of redesiging our economies to prosper sustainably. The challenge for individuals is the clearest–living lightly; people who support care about sustainable development and environmental quality –especially people in developed countries–have to start asking themselves whether their quality of life really depends on accumulating more “stuff,” however “green” it may be. The challenge for designers is clear as well–durable goods, efficient processes, cradle-to-cradle responsibility.

The path is less clear for business leaders, economists, accountants, comptrollers to create the social invention of negastuff. Businesses, in turn, need to explore the paradox of how to prosper financially while moving less, not more, stuff through both the biosphere and the economy. The answer may not lie in more “green” products, but in less stuff altogether. And this portends a profound change in the way we do business. Welcome to negastuff.

(c) 1994 Gil Friend. All rights reserved.

New Bottom Line is published periodically by Natural Logic, offering decision support software and strategic consulting that help companies and communities prosper by embedding the laws of nature at the heart of enterprise.

Gil Friend, systems ecologist and business strategist, is President and CEO of Natural Logic, Inc.

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