Paul Hawken, Amory Lovins and Hunter Lovins believe our envi-ronmental problems stem not from the greed of capitalists, but from their failure to be greedy about the right things. In other words, they see pollution, extinction, resource deple-tion and global warming as mainly the fault of — bad accounting.

If we kept track of what nature is really worth, they say, we'd take better care of it. And taking care is more important now than it was, say, 250 years ago.

"At the beginning of the industrial revolution, labor was overworked and relatively scarce (the population was about one-tenth of current totals), while global stocks of natural capital were abundant and unexploit-ed," they write in Natural Capitalism: Creating the Next Industrial Revolution. In those days, manufac-turers could take nature for granted. Of course the river would cleanse their effluent, and the next cold front would disperse their smoke. But no longer. "After two centuries of rises in labor productivity, the liquidation of natural resources at their extraction cost rather than their replacement value, and the exploita-tion of living systems as if they were free, infinite, and in perpetual renewal, it is people who have become an abundant resource, while nature is becoming disturbingly scarce."

Natural capitalism's four-part solution promises profit, not sacrifice: (1) Use natural resources at least 10 times more efficiently. Then use even less (2) by redesigning industrial processes so as to reuse all waste, and (3) by redesigning business plans to sell services rather than products. Businesses that do these things first will get an edge on the competition, and as they take over the economy they will (4) lobby to end government subsidies for misuse of resources and allow nature to restore and replenish itself.

"As each of those multiplying savings turns less green land into brown wasteland, less fossil fuel into climate change, less stuff into waste, [they] will accelerate the restoration and increase the abundance of natural capital." In the long run, we can prosper and live on "a net flow of very nearly nothing at all — but ideas."

Consider your office carpeting. Every decade or so it's ripped up, landfilled and replaced by different carpeting, disrupting work and exposing people to carpet-glue fumes. Nor is time all that's wasted. Chances are, only the carpeting in high-traffic areas is even close to being worn out. And "it takes two pounds of fossil fuel to turn one pound of mainly petro-based feedstock into carpet, plus an additional amount to transport it to the customer and back to the landfill, where it resides for the next 20,000 years or so."

Natural capitalism to the rescue. Step one, resource productivity, would be to recycle the old carpet by "downcycling" it into carpet backing, as some companies are already doing. But eco-efficiency is not enough by itself, maybe even counterproductive. If all a company is doing is downcycling old carpets, it will still have to landfill the backing eventually. And being able to make carpet more efficiently might just encourage us to carpet more surfaces with cheap stuff that has to be

Illinois Issues July/August 2000 | 26---Also available in PDF

The necessary additional natural-capitalist steps have been taken by the Atlanta-based company Interface. Step two, closing the production loop, is represented by Solenium, that company’s new polymer product that can be “completely manufactured back into itself ” and provides a better surface as well. Step three, moving from product to service, is Interface’s changeover from selling carpet to leasing floor-covering services. As the authors say, “Whenever indicated by monthly inspections, Interface replaces overnight the 10-20 percent of the carpet tiles that show 80- 90 percent of the wear. This reduces the amount of carpet material required by about 80 percent because the unworn part of the carpet is left in place.

“It also provides better service at reduced life-cycle cost, increases net employment (less manufacturing, but more upkeep) and eliminates disruption, since worn tiles are seldom under furniture. Because the carpet is laid in the form of tiles, glue fumes are also significantly reduced or possibly eliminated.”

Note that, as a service provider, the company now profits from reducing waste and making more durable car-pet, rather than from making and disposing of ever-larger amounts of carpeting. By following this strategy, we are told, between 1994 and 1998 Interface doubled its revenues, nearly doubled its employment and tripled its profits.

As long as Interface thought of itself as being in the business of “selling carpet,” it could only reduce its resource consumption and waste by so much before running into the so-called law of diminishing returns. That “law” shows up all the time in environmental disputes.

Environmentalists call for stricter emission controls; manufacturers complain they’ve already made their plants 90 percent cleaner than they were 20 years ago. Getting them up to 95 percent cleaner will cost a lot more, and reaching 100 percent (zero emissions) would be absurd. It might even bankrupt the company.

These authors bypass both sides of this tired debate. Instead of trying to solve the same problem in the same way, and getting stuck, they encour-age what they call “whole-system engineering” and what most people might call “stepping back and look-ing at the big picture,” all the while keeping in mind that it would be a good idea to reduce waste, consume fewer resources and imitate natural process-es. In other words, they reconceive the problem by asking a different and (usually) larger question.

The plodders are correct in the short run. If you confine yourself to thinking of ways to recycle existing carpet-ing, you will find that after a while you are left with carpet backing that is so broken-down it would cost an absurd amount to try to refash-ion it into anything. That sort of dead end is a sign that it’s time to try rethinking the business of floor covering from first principles. By looking at the whole system (instead of griping about environ-mentalists who know nothing of carpet backing chemistry), Interface was able to find ways to provide floor-covering services, drawing on fewer natural resources and emitting much less waste. And they were able to do so profitably, instead of spending money trying to refine an outdated design.

Courtesy of the Illinois Department of Natural Resources

To jump-start the process of invention, it helps if we want to restore natural capital. (Interface’s CEO was reportedly inspired by reading Paul Hawken’s The Ecology of Commerce.) It helps to reflect on

Illinois Issues July/August 2000 | 27---Also available in PDF

But the ultimate resource, as the late economist Julian Simon pointed out, is human ingenuity. And that resource, too, needs to be fostered. In a command economy like that of the former Soviet Union's, most ingenuity goes to waste, leading to environmental horrors worse than capitalism has brought about.

Carpeting is one of dozens of examples. The authors ran out of room in the book and packed more into a Web site (www.natcap.org). Their enthusiastic and lovingly detailed descriptions of ultra-light hybrid cars, superwindows and ink that floats off paper almost conceal the holes in the book's intellectual fabric.

The book's argument devolves through three stages. At first, Hawken, Lovins and Lovins say capitalism is in danger of destroying itself because industries do not pay the full cost of resources or pollution. But then, they acknowledge that they don't know how to properly price these things (and that maybe some of them are priceless), so as a practical matter, businesses should just proceed as if natural resources and services are worth something more than zero, even though we can't say exactly how much. Finally, in their examples (such as the one about Interface), they describe how companies can prosper on entirely conventional terms by eliminating waste and redesigning processes and rethinking their businesses. No particular worry about nature is required. The plain ordinary profits to be made by eliminating waste of energy and materials are so great that even CEOs with anti-envi-ronmentalist convictions should rush to embrace them, simply as a matter of business self-preservation.

The result is a fascinating book that takes us on a tour of American businesses' fantastic and environmen-tally damaging wastefulness. But it is a bit odd that the authors display no interest in grappling with the hard accounting questions — figuring out how natural resources and services should be priced.

Courtesy of the Illinois Department of Transportation
Illinois River bluffs in Pike County

As it happens, market-oriented environmental groups are working on this very problem. Environmental Defense, for instance, is pioneering a

Illinois Issues July/August 2000 | 28---Also available in PDF

A similar confusion beclouds the book’s relatively brief discussion of the big policy picture. On one hand, the authors say in their preface that public interest legislation is unnecessary. Going green makes so much money “companies that ignore the message of natural capitalism do so at their peril”— the train will leave the station without them. Likewise, we don’t have to convince business-people of the danger of global warm-ing, they argue in a later chapter, because the needed countermeasures are so profitable. “Those who worry about climate can see the threats to it ameliorated. Those who don’t can still make money.”

This is great news if true, because it seems unlikely that we can save the environment by piling regulation upon regulation. Not only is that process cumbersome, at some point it risks stifling the ingenuity that is the mainspring of both economic and environmental progress.

But toward the book’s end, the authors take back their good news in a most peculiar way. They suggest that progressive carpeting companies should try to get a law passed banning old carpets from landfills.

This is exactly what they said up front would not be necessary. And indeed, what would be the point, if the progressive companies were already expanding and profiting by bypassing landfills? Why wouldn’t their competitors be avidly imitating them? Why do Hawken, Lovins and Lovins suggest that Interface should use time, money and ingenuity to lobby Congress for a special favor? Couldn’t that same time, money and ingenuity be better employed to make the business more profitably earth-friendly? Where along the way did the authors lose their faith that natural capitalism can get the job done? Inquiring minds want to know, and they won’t find out from this inspiring, but flawed, book. 

Harold Henderson is a writer for the Chicago Reader.

Courtesy of Lincoln Memorial Garden and Nature Center

Black-eyed susans

Illinois Issues July/August 2000 | 29---Also available in PDF