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Beyond sustainability

Utopia, Technology and Future

TITLE: Indonesian Scenario

WRITTEN BY: Lorenzo Matteoli

DATE: Djakarta June 12th, 1993

TRANSLATION EDITED BY: Wendy Charnell

Twenty years after Meadows limits and potentials of sustainable development 
for Indonesia and Italy

 

Abstract

The paper describes the general trend of the global development for the coming decades assuming Meadows recently published dynamic world models as a reference. Within this framework the paper defines a set of paths for Indonesia and Italy to identify areas of possible integration and cooperation in the field of science and technology R&D.

The author suggests some proposals for present programs.

Sintesi

Viene tracciata sulla base delle modellazioni di Dennis Meadows una ipotesi del quadro globale che connoterà lo sviluppo nei prossimi decenni. Si formulano quindi alcuni scenari possibili per l'Indonesia e per l'Italia allo scopo di individuare criticamente le aree di possibile integrazione e assistenza nel campo della ricerca scientifica e tecnologica.

Vengono tracciate alcune proposte congruenti di collaborazione fra i due paesi per il breve medio termine.

The global asset

It is likely that energy and environmental constraints will dictate the siting of most manufacturing processes in the next twenty years. Man power, cost and markets will be important collateral factors. Profits allowed by the optimization of the various constraints will supply the capital investment and pay for the needed technologies and tertiary services. The dynamic balance of the different solutions will organize trade and commercial exchanges. Finance and venture banking will find capital and manage trade off. The assumption that energy and environmental constraints will dominate development and exchanges, for the next twenty years needs attention. Specific political surround contingencies in the various cultural and geographical situations are also important. General models describe the so called megatrend . Specific time and space windows are subject to anomalies, changes and contradictions, thus they are highly unpredictable.

The potentially most disturbing factor is the time needed by communities and institutions to react to accidents, contingencies and emergencies: which is clearly a political responsibility.

Single countries, or whole geographical areas, for political reasons may choose options not consistent with environmentally sustainable strategies. That may happen because of emergency pressure. It also may result from incompetence, lack of information, or from speculative, short term, specific interests. The theoretical description of the general model is a rather enjoyable literary exercise, not particularly hard to practice. The specific detailed description of the model, for given geographical areas, and for given space and time windows, is less easy. This is due to the uncertainty with which local conditions inform the general model. Assuming the general model as a natural process, any deformation of the course, due to peculiar, local, or contingent conditions, will induce rebounding effects before the action can resume its original routing. If it will ever resume it. This assumption may appear grossly deterministic if you think that the resumption crisis has to occur in the same timespace window. The resumption crisis may happen in different areas, of the culture, of the economy, of the geography and of the physical environment. In different times and in far away places, difficult to relate to the original cause by simple consequential deduction, difficult to foresee and to control by a governing action. Meadows vividly describes the present situation of the Planet as the situation of an overshoot society: grown too fast beyond the limits of environmentally available resources, thus creating a set of unbalanced conditions that Meadows describes as follows :

1. underground water reserves, forests, fish reserves and soil impoverishment.

2. Pollutant's accumulation and diffusion increase.

3. extra capital, energy, labor and raw materials needed to harvest deeper, farther, less concentrated resources.

4. extra capital, energy, labor and raw materials have to supply commodities and services that were once free (waste processing, flood control, air, control of epidemics, soil fertility, species conservation and defense).

5. extra capital, energy, labour and raw materials needed to defend or to conquer access to resources concentrated in few remaining spots of the Planet (such as oil in the Middle East and Gulf areas);

6. wear of the physical capital (infrastructures and other long lasting assets: dams, highways, ducts, pipelines, cities, transportation hardware, etc.)

7. reduction of the investment in human resources (education, medical care, old age services, leisure) to pay long term debts and short term consumer demands.

8. sharp conflicts on resourceaccess rights and on polluting emissions standards, rights and duties.

9. decline of social solidarity, mutuality and awareness.

10.hard social differences and confrontations.

Meadows' model refers to the whole Planet: if one wants to explore more specific geopolitical situations or single countries the model needs critical revision and consistent elaboration. The models studied by Meadows after the famous 1973 "Limits to growth" clearly show the overshoot conditions of the world society. A situation dominated by industrial production crisis, economical crisis, social conflicts, cultural gloom, infrastructure fragility, services chaos that will certainly end in.... collapse. What is now going on in the former Soviet Union, at the continental geographical size may be regarded as a very clear example.

The modes of the economical/environmental collapse can vary. Liberia, Mozambique, Somalia, Guatemala, Salvador, Bosnia Ertzegovina, are other collapse examples where the industrial overshoot condition is not exactly the main cause. Specific developments of the general model are different in the various space and time situations. What follows is a brief description of Meadows main assumptions somewhat extended and supplemented with some further thinking. The purpose is to promote a qualitative sensitivity of the set up in which to insert specific realities such as Indonesia, Italy, the United States, China.

The first set up could be called More of the same

.
Faces in Jakarta 1993

More of the same scenario

Uncontrolled environmental exploitation proceeds, technology allows consistent increases of agricultural as well as of soil and sea yields. Through bitter local conflicts, signs of deep balance disruptions, the economy of the privileged part of the world society moves on to post industrial levels. Between 1990 and 2020 there is an 85% industrial production growth and a 50% world population growth. Resources eventually end around the year 2020. Dire scarcity begins in the year 2015 and the weak areas start entering the collapse stage. Environmental decay phenomena link up in the catastrophe chain: soil erosion, water availability, pollution in the food chain are beyond control. After 2020 pollution levels sharply curtail soil fertility, wide metropolitan areas of the first world, of the second and third world are environmentally out of control and technically inhabitable. Air in the cities becomes unbreathable, morbility is high and death rate peaks. Life expectancy in urban territories is 20% lower compared to present levels, productivity and efficiency more and more difficult to secure. Water tables and wells are almost exhausted or yield undrinkable and untreatable water, epidemics spread beyond control from the third world countries to the industrialised first world areas. Energy supply is unpredictable: most nuclear plants built in the eighties and nineties have to stop operation because of physical decay. Countries heavily relying on nuclear electric energy that have not been able to double their generating plants face drastic structural shortages. Black outs, food shortage, transportation stoppages, are everyday matters. People leave wide urban areas where a marginal population settles in. Social order control requires institutional severity and military behaviour: police shoot on sight, protection costs reach extortion rates.

The end of urban civilisation is a fact. Urban refugees invade rural communities and territorial periphery causing confrontation and conflicts. Capital needed to face and manage the catastrophe absorbs industrial production investments. Social aid and services drop to minimum standards. Final decline of the industrial system begins, agriculture and services follow suit. In some areas the collapse phase resulted in uncontrolled consequences such as the fall of former communist regimes, Other clear signs are the inter ethnic conflicts set up by economical marginality. Capital intensity needed to secure primary resources widens the gap between post industrial and third world countries, the third world countries will never be able to meet their debt. Death rate increases sharply and birth rate falls, the population of the world falls back to pre1980 levels. The average age of the population rises as a result of higher death and lower birth rates. Financial, economical, industrial and political power concentrates in the countries capable of controlling the catastrophe, or less exposed to it because of long term previous planning. The year 2040 is running, the generation in charge was born between 1990 and 2010: our grandchildren (if you are somewhere over fifty).

If a completely different set of actions takes place, in a rather short delay of time, the more of the same model of the global asset can change.

The whole process flows along alternative courses in what we may call the do or die program.

World population tops at 8 billion, pollution critically peaks around the year 2020. After that year a slow paced trend back to normality sets in except for a few permanently damaged areas. Conversion rates of non renewable resources allow projection of the trend until 2100 without collapse. Metropolitan areas receive specific attention: environmental pricing finances consistent investments in fossil fuels substitution technologies as well as in transportation and building climate conditioning. Installed power cuts yield consistent reduction of low layers atmospheric pollution. Know how, capital and manufacturing transfers to developing countries set the course toward a more balanced world, The disrupting tensions inherited at the beginning of the third millennium of the Christian age slacken slowly. Employment levels raise consistently thanks to environment care and alternative energy technologies induced jobs. Environmental quality reflected in currency values pay, through complex cycles and reverberations, the capital losses and the jobs lost by new manufacturing siting and shut downs. Human kind lives a peculiar moment of the ten thousand centuries history of the Homo Sapiens.

Governing the alternative

The general set of actions capable of governing the dangerous course of events and steering the system to an alternative course is a matter of interest. The strategy has to rely on social, cultural, political, monetary, macroeconomy, microeconomy and technology tools: all of them simultaneously interacting for several decades in a worldwide dynamic game. Never such a wide and complex plan has been engineered or mastered in the history of Human Kind. Meadows has organised the strategy in six main, basic sets. It's quite clear that each of these can develop in different ways and modes, according to the different spacetime frames and according to the various political, economy and technology surroundings. What follows is a critical and commented interpretation of the six basic sets proposed by Meadows.

1. Clearer and better signals: Environmental monitoring either of healthy systems and of ailing ones at the various geographical scales has to be sharp and timely. There is need for continuous information on environment and economy. Consistent processing of collected data has to be fed to the people and to government responsibilities with plain, understandable languages. This will allow integration of environmental costs in economical pricing. A thorough revision of all the standard economical indicators will then represent the finite dimension of environment and resources. The boundary line between benefits and costs, welfare and services, devaluation and income will be set in clear terms.

2. Preemptive action: Read with attention signals coming from monitoring. Set up early action to respond, in the shortest possible time, to any environmental stress symptom or sign. Prepare and keep available strategic response models, consistently organised and funded, set up the lines for their implementation. Set up the technical tools and the knowhow for adequate action. Instruct the public cultural understanding for the chain of command needed for the implementation of the response actions. Instruct planning flexibility and mobility in the institutes responsible for land and environment management. Promote the understanding of systems and of system structural interactions .

3. Minimise use of non renewable resources: Use fossil fuels, underground waters and mineral waters with maximum efficiency rates (fuels in energy cascading systems and waters in multiple cycles structured usage). Whenever possible recycle spent resources. Invest fossil fuels and finite resources as transition tools to renewables.

4. Prevention of erosion: Soil productivity and related organic and biological systems should be protected. Underground waters, biological systems and their environment should be recovered and increased. Management and control of resources aimed tat their natural reproduction needs precise information on their structure and on the environmental conditions required. The issue of social and economical sanctions against their waste or improper use is a first priority issue.

5. Maximum efficiency of conversion processes: Comfort and agreeable conditions stem from waste elimination without any need for sacrifices. Increase of system efficiency could almost automatically result, in a short time, from the environmental pricing of goods, utilities and services. This operation needs strategies and tools to control macroeconomics inducement: clearly a matter for World Monetary Institutions short term agenda. Such a measure could also move the general long overdue release process of financial tensions between first, second and third world.

6. Control exponential growths: None of the before listed strategies can have effective implementation without preliminary control of pathological growth phenomena. This area is a preliminary binding condition for the government of the whole complex transition process to sustainable development. It is in fact a subversive measure compared to the historical set up induced by conservative capitalistic or communist economies. Both systems based on an always more philosophy and not on a quid sufficit criterion. It's a simple and radical position quite different from the present set up that relies on the continuous and unlimited growth of individuals and of their organisations. A few decades of police induced communism and of non critical liberalism cancelled from the memory of men that the ethics of sufficiency were natural values since centuries and millennia. Values which have deep roots within our culture. Exponential growth, instead, is a recently induced behavioural pattern. There is more cultural awareness than political intelligence or technical competence for this change. If this statement is true course of reasonable utopia is not completely off our potential reach.


Faces in Jakarta 1993

The sustainable revolution

The complexity of the actions needed to change towards sustainable development, qualify the event as the most important revolution in the history of Human Kind. If such a revolution should ever take place, it will be comparable to the shift from hunting to agriculture. The difference is that this revolution will have to get into full operation in less than a century. The chances for the event to take actually place are matter of discussion and questioning by many. Current theoretical tools for the analysis are not adequate: this revolution will not result from economy or social problems, but from biological needs. The profile of the event will be evolutionary. A revolution carried out by billions of individuals, driven by deeply rooted feelings and by the unnegotiable demand for survival: either do or die. Human Kind never had such an experience before. The questions opened by the problem deserve some thinking: without falling into a pattern of parascientifical millenarism. At the beginning it will not be easy to detect the event because of the habit forming slow pace and of the subtlety of most symptoms. After a few decades the process will quickly get into catastrophic pace. It's going to be a strange alternative catastrophe . Alternative catastrophes did never happen in nature and the concept could deserve some discussion . Man is an antagonising, anomalous accident within Nature: the only system moved by rationality i.e. by the capacity of choosing and acting according to criteria which are not, only and merely, instinct. Up to now the rational exception has defended Man against Nature and Environment: from now on human rational choices will defend and protect Nature and Environment for Mankind. With completely different criteria from the set ones, but always rationally. The next 50 years may be the years of the revolutionary, alternative catastrophe for sustainability. The other chance is the less glamorous catastrophe of collapse. In either case the exploration of the various models may be an interesting task. The management of an economy through those processes may differ radically. In one case taking an early advantage of the sustainable solution and bargaining a liveable condition through the worst phase of the transition. In the other reducing the cruel harshness of the unavoidable collapse. Knowledge can also be useful to exploit the contingencies of the catastrophe and harvest profits available to forerunners. There will certainly be posh and elitist ways to live through the catastrophe for individuals and societies. In any case it may be worth while trying to stay on the right side of the environment. If that is not possible, on the right side of the cash flows, that the environmental collapse will generate. Catastrophic forecasting, even when scientifically supported, always generates strong opposition which soothe the natural leniency of men to laziness. The natural attitude, as individuals and as groups, is to remove the very idea of our end (death) even when clinically certain. Another set of reasons that suggests the exploration of Meadows models for specific situations is the chance to instruct the so called Oedipus Effect on the possible futures. Thus, the foreseen future does not flow in the designed way, just because it has been foreseen. By describing the future one casts a condition on it.......! Another way to put the problem is, that since one future has to happen anyway, one might as well try to describe it anyway. This should make it more easy for a specific wanted or desired future to happen actually. This is, after all, the essence of the project as John Dewey meant it.

The real story

Now, there are three ways to continue the story.

One, the positive optimistic way: it's a hard situation, extremely difficult, but we will make it. Proceed then to explain the ways and means.

Two, the catastrophic pessimistic way: the situation has gone beyond control, we will not make it. Proceed then to the description of the hellish route to the final act of the catastrophe.

Three, the real story: the situation has gone beyond control since more the thirty years and there are very few ways out left ....for some countries or geographies (say 15% of the world). For some other countries and geographies (say 60% of the world), there is sure physical annihilation after torturing decades. Roughly one fourth of the world is now in the predicament of going one way or the other. I.e. one fourth of the world has an available transition to sustainability. A reason to invest in that course of action with some hope. Some will make it and some will not. A lot of institutions are studying the 'physical planet' to see the early signs of the coming global catastrophe. It is indeed a commendable effort and the data are statistically cert and useless. One can be sure that something is going to happen. Nobody can tell when, where and how, nor they can tell you exactly what is going to happen. This kind of forecasting is more similar to a prophecy: it is written..........Good for ethical exercises of humility, but useless for actual planning.

Global warming and climate change

Global warming is a measured fact and according to 1988 NASA reports it does relate to the calculated models: the climate is going through radical changes and the ways of adaptation to new heat balances are unpredictable. Some countries or areas may not perceive any change at all while some other country will be hit by heavy climate shocks. Long dry spells, extremely heavy rains, record high temperatures and record lows etc. The ozone layer damage is a fact not only over the South Pole but in wide bands of the northern hemisphere. That's the effect of the ozone killing chemicals emitted during the seventies. The ozone killing chemicals of the eighties are still climbing through the atmosphere. The result in cancers of the skin increase is astonishing and already statistically recorded in Australia. Signs of crop losses and marine life damages are emerging through the numbers of the agricultural and fishing control world institutions. The investment needed to reduce ozone killing emissions, if technically possible is not known. Not to talk about the feasibility and cost for rebuilding a consistent ozone layer: only a planetary seminatural process can take the challenge and none is in sight to date. The greenhouse effect due to CO2 is also a certainty. CO2 concentration has gone from 315 parts per million to 352 parts per million since 1958 to 1988. Which is way above the highest concentrations ever experienced on earth in the past 160.000 years!

Other greenhouse effect gases increments proceed at even higher pace (methane, nitrous oxide, CFC). While CO2 growth rate since 1958 has been 0.4% per year these other gases are increasing at a 5% rate.

Uncertain results of precise data

The result on climate of the interaction of these factors is what scientists refer to as 'global warming'. Diminished agricultural production, long dry spells and droughts somewhere, violent rains somewhere else, sea level raise (on the long run) will follow. There will be a consistent change in the thermal flows that control the dynamic energy exchange pattern and thermal balance of the globe. Macro climate structures such as ocean currents, trade winds, jet streams will be affected. All these phenomena belong to the 'uncontrollable risk' file. In fact nobody can say exactly if, how, when and where they will eventually take place. We only know that if they will ever take place, it's going to be tough. If the disaster has planetary dimensions there's not much that can be done. No technology, no engineering, no design, no long range planning or strategy can handle the GNABGIB . Design and engineering strategies can only handle'surprise free scenarios' such as the following tentative proposal:

The physical planet is going to run roughly in the way it has been running in the last three centuries. There may be an increase of natural disasters in statistically perceivable rates , with slow and specific, detectable increments, in identifiable geographical areas. Droughts in Central Africa and Central Asia, floods in the Indian Continent and Continental China. The pattern, frequency and general routing of typhoons through the Pacific and Atlantic Ocean may change. Or maybe loss of soil productivity in the American Midwest, heavy and long rainy spells in northern Europe. Also morbility distribution, diffusion of bacteria and organic processes pattern changes can be foreseen.

Countries and areas more prone to floods and droughts may have to raise their emergency structures and funds. International agencies may also have to raise their emergency funds and increase technical and organisation readiness for world civil protection actions . Environmental refugees will increase and will need competent institutional bodies in single countries and world agencies. With this general assumption we can go back to the opening statement in this paper: 'it is likely that energy and environmental constraints will dictate the siting of most manufacturing processes in the next twenty years'. Energy and environmental constraints that we can specify.

Environmental saturation

A territory is environmentally saturated when the cost of environmental safety is higher than the economical advantages deriving from settled activities and processes. Sustainable saturation of the environment implies that the balance has time and space limits: i.e. sustainable for how many years, in which area. There may be a social aspect to be considered and sometimes this limit is more important than the mere economic one (see Fred Hirsch 'Social limits to growth'). Sustainable with which behavioural constraints, on which population section or on which generation. Environmental saturation is related to the combined economical strength and social acceptance of a given geography and to environmental thickness, integration and resilience. Environmental saturation limits are not only related to physical aspects of the environment. A near saturation situation may occur in a powerful environment used by a population not willing or culturally capable to change or to adapt their behavioural patterns. On the other hand sound and reliable overall environmental situations may result from highly adaptive social and cultural structure living in a delicate and fragile environmental system.

Some general rules

Systems will set and operate at steady state regime trying to stay within the limits of sustainable environmental saturation. Every 'country' or geography tries to fit into this level a set of activities capable to feed and to fulfil the needs of the inhabitants. The rich countries keeping the clean, and possibly most profitable, activities at home and buying environmental space for dirty and less profitable jobs from the poor, so called developing, countries. The poor countries, squeezed between environmental shambles and survival, or driven by plain greed for easy profits, and apparently succumbing. This is the game going on at present at a pretty tough pace that will get wild and savage once saturation levels will be closer. This is the main area of action for the international institutions responsible for environmental strategies and protection. A strong effort has to be spent to carry out or enforce some of the many stated rules. The environmental conditions in most DC are extremely fragile. The management and control capabilities available to deal with dangerous waste or processes are often way below the needed standard. This means that dangerous wastes and dangerous processes exported to third world countries are, or may become, time bombs for the whole Planet.

The on-going revolution

A reasonable step to take when you try to describe the future is to have a decent perception of the present. By all means the future is the development and the continuation of what is happening now. As the present is the development and the continuation of what was going on yesterday. We are so busy taking care of the everyday accidents that we give the future for granted. Sometimes we remove the problem as in the famous punch line: we will build that bridge when we get to that river! That contains much more certainty one would think. You know there will be a river, that you will need a bridge, that you will get there and that, eventually, you will build the bridge. No peanuts ...! The compact description of the present is also a problem. Where does one start from? How does one shrink the description into a manageable size? The answers are easy: anywhere and anyway. One can tune the first choice to any specific purpose. Hierarchy of facts and events is not important either since we make the assumption that everything relates with everything else. It is important to think about the future as manageable matter. Among all the possible futures the most hardly wanted will happen. In a world of forecasters it sounds odd to stress the need to forecast. I will bring just one example to prove how bad we are at it and how inadequate our efforts are. The event was seeked, waited for, wished and fought for. The Western culture was sure that 'sooner or later' communism would have to face the result of its failure. Nevertheless nobody has ever thought anything about what would have been happening after the wiping out. The end of communism was given for granted. The event was so obvious that whatever would follow was of no matter for inquiry. So I will try to describe what is going on now. I chose 12 items that I feel the most potentially apt to set conditions on the future(s).

1. The new asset of 'trade areas': CCE, USA, NAFTA, COMECON, ASEAN, Pac Rim, South America.....

Trade areas set up in the fifties and sixties have reached or are reaching the scope that was their original objective. The scope was to establish and grant wide markets for goods and services. Only with such wide markets manufacturing processes and organisations can operate at the so called minimum critical dimension.

Targets achieved open new problems. Thus relationships between the various 'commonwealths' are now on the agenda and have to be defined or redefined.

This has to be done while the trade areas proceed in their natural development. Membership and political structure of EEC, COMECON, ASEAN, are under constant revision. In some instances, such as COMECON, the fundamental political structure of the trade area has been disrupted.

2. End of communism phase 'n'

Collapse of Communism opened a chain reaction of events most of which were predictable. The chain reaction is not finished and three years after the historical 1989 the fall of the Eastern Red Empire is a prime historical mover. The next twenty years will probably be marked by consequences of the end of communism. A lot of western political understanding has been based on and has grown for a century on the ideology of 'anti communism'. This ideology shaped cultural attitudes and behavioural patterns, demand of goods and commodities, and thus, industries, manufacturing processes and technology development. The chain of events set forth by the fall of communism is far from the end. Systematic, strategic thinking on this matter is still an open challenge. And it may be a highly profitable one too. Just a few hints. Communist/capitalist management of market dynamics that some former communist country is trying has to be monitored with attention. Communist capital to third world countries has to be substituted with all due consequences. Technological infrastructures supplied by USSR will have to be attended by (and paid to) a different maintenance responsibility. Former communist countries will have to face very hard problems in order to make people work: in fact working apparently is something that people in marxist workers' paradise are not very much accustomed to. This is the present problem of Eastern Germany, Poland, Tchekoslovakia, Russia, etc. The next twenty years will be specifically dominated by the aftermath of the communist collapse. Not all the adaptation events will be pleasant.

3. Fast pace development of intermediate economies

Economies of those countries which do not belong neither to the industrialised world nor to the third world. Some of their growth indexes are astonishing. Either their condition was not exactly 'third world', or they have been managed with skill and intelligence. In some cases both apply. Understanding the specifics of each situation may be a rewarding activity for investment institutions. Not understanding them may be very dangerous.

4. China 'syndrome' n. 2

China is the odd ball: a billion people market, one century of poverty communism, available natural resources, hitech niches. On the shady side: unclear leadership, inflation brinkmanship, information language barrier, lack of skilled labour. A set of 'what happens if' s on which to invest scrutiny and careful research. Not on long term time reference: answers within the next 12 months are the only useful ones.

5. Money mobility

International financial banking can supply around the world, around the clock services and move money in an extremely fast and efficient way. Never the business community enjoyed such a favourable, widely accessible situation.

6. Fastripe capitals from intermediate economies

One result of the intermediate economies fast growth indexes, is the short investment capital return time. Investment capital for new enterprises is readily available in short length of time. Which also implies a specific investment attitude: the general term that may be used to describe it is 'young' . A young attitude in structural investment has, again, specific consequences on investment choices implementation. More mistakes are possible for individuals, but more chances are available to systems.

7. Environmental cost pricing

Neither the 'greens', nor harder revolutionaries are going to stop the environmental catastrophe now rolling the downhill path of conformity. 'Environmentalcost pricing' is going to: if you have to pay for the environment you will have to care for it too. Environmental cost pricing is going to set the priorities on market and consumer choices. This tool is also going to supply the capital needed for the achievement. This is a precise responsibility of Governmental agencies.

8. Siting of primary industries

The common siting of primary industries has always been near the related resources. Economy reasons have, in the past, suggested to split processes to maximise profits. Environmental protection may suggest, for the future, other ways to deal with resources and related processes splitting.

9. Siting of secondary industries

Siting of secondary manufacturing processes will be under energy and environmental constraints. The rules of the game will be energy cascading, environmental integration, process integration, recycling of by products. Market constraints will rank as a second or third priority in the check list.

10. Environmental quality priority

Performance quality, service quality, design quality, presale and after sale assistance quality, have been the 'quality' targets in the last 30 years. For the next 50 the priority will be 'environmental quality' . This type of quality requirement is going to put a lot of pressure on technology and innovation. Some signs of the coming constraints are already seeping through advertising .

11. Raise of ecotechnologies (tech + natural processes)

Natural, organic or physical processes associated with artificial transformations to reduce energy demand will substitute current hard technologies. Low enthalpy thermal pollution waste control will gradually take over and get into the processes. Investments to change cities into self sufficient natural webs will involve many generations to come. Political understanding for this enterprise is not yet ripe: but some early signs can be detected. The public is more aware then policy makers.

12. Politically induced waste values

When waste has a value, waste treatment will have one too. Capital to seek that value and the consistent profits will be easily available. The Toepfer Law, recently issued in Western Germany, is an example of politically induced waste value. The consequences of the Toepfer Law are upsetting the market of recyclable materials in Europe. Through the linkages of 'commonwealth' markets, this lawmaking style is going to spread like prairie fire.

A push to technology both on the front end of market behaviour and design, and on the side of recycling. Capitals will move fast to seek this area of investment, setting a strong pressure on macro economy.

Environmental protection investment: some theoretical elaboration

The founding fathers of the economical conceptions that ruled the World for the last two centuries (Smith, Marx, Ricardo ....) thought, eventually, that the environment was a free, infinite, empty space and that resources would have been indefinitely available. The idea of water, air, energy, earth shortages would have appeared absolutely absurd to any of them. The fact that throughout the world places where to dump waste are rare and extremely expensive and that the cost of disposing used matters is a significant percentage of the cost for producing them shatters the foundations of their theoretical castles. Currencies do represent the overall value of a country as a producer of goods and services and also take care of some future projection. It is doubtful though that, to date, their exchange rate is in any way related to the environmental health of the issuing country. If the International Monetary Fund should classify currencies according to that standard we would see some changes........quite more radical than the ones that followed the reassessment of the INP in terms of purchase parity.

Modern macroeconomy and financial exchanges have ways to take care about externalities such as environmental quality and resource availability with future values. Market operators have still to bring that concept into practice. And so does the public. This conceptual failure bears great responsibility for the present environmental catastrophe. Also the difficulties for setting up and financing consistent environmental protection policies have their roots into the unbelievable distraction of the founders of modern economy. If environmental damages and environmental quality could be expressed in monetary terms, and consistently cashed by the individual investor the environmental problem would be solved. Probably there would not even be such a problem. After two centuries of wild environmental aggression and ruthless behaviours it is not easy to establish an orderly asset. Most of the time the time lapse between investment and return exceeds the life of individuals, sometimes the place of investments and the place of environmental quality return are separated by thousands of miles and by national boundaries. The clean up is often related to polluting agents that date twenty, thirty, forty years back and that doesn't make the matter more simple. So the investor profile has to respond to quite a few constraints: he must be willing to clean historically consolidated situations, to tackle problems today and wait 50 years to see the results, to tackle problems in one continent and see the results in another continent.

For every situation the right responsibility has to play its role: the individual or specific industry, the association of industries, the local community, the local Authority, the regional Government, the central Government, the international communities and the various bodies that represent them: banks and financial institutions. The terms of reference of competence and responsibility for every level involved must be clear and the financial burden has to be defined consistently. The task for the political agenda is to set out the conditions so that burdens, returns, advantages are properly managed and correctly shared. Currencies to day do not represent environmental values, but pretty soon they will have to in order to overcome some of the problems related to the association of responsibilities, investment and returns. Some industry shares and credit titles already represent the 'environmental quality' of the operation. In the future the environmental consistency of an industrial operation or process is going to be ever more stringent: any interested investor or financial responsible party will look carefully into the environmental qualifications of industrial activities applying for credit. The market will take care of a lot of things through this condition.


The market in Duren Bangka, Kemang, 
Jakarta 1994

Environmental protection investment in the developing countries

The current assumption of the industrialised or postindustrial world is that environment is a priority and environmental control technologies are the first investment everywhere. The intermediate economies and developing countries point of view is not so clear cut. Why can't we first get industrialised and rich? Once rich and affluent, we will take care of the environment, devoting some of our richness to the problem. Why do we have to burden the fragile intermediate economy and the present poor generation and slow the pace of development investing resources on environmental protection? Usually the dilemma is stated in blunt terms: we prefer to get rich and dirty than to remain poor and clean. The question deceives the complexity of the problem, but it indeed deserves a precise answer.

The more perfect a system is the less return you have when you invest to achieve further perfection. Short of any breakthrough. The same amount of money yields 100 on the early stage and yields 5 on the mature stage.

This can also be applied to pollution control investments: when you invest at the early stages your return is fast and consistent. When you introduce pollution control strategies on a highly polluted environment your returns are small and slow. Sometimes irreversible damage has occurred which cannot be mended. This means that in many instances there will not be a chance to clean once you are affluent. There are also very good chances not to get rich at all. The rich and dirty alternative is not easily feasible because the cost of current operation in dangerously polluted environments may become too high. It may also mean that the money to be invested on the heavily polluted environment after 50 years of malpractice will exceed by factors the sum needed in present value at the early stages of the process, for comparable, and eventually better, results. You can wait to spend until you are rich, but you will spend 100 times what you should spend now, and the results won't be the same. If you get there. Individuals cannot always afford this strategy, but Governments, International Banks, Societies of Nations, have to. They can also cash on the futures that are going to be heavily informed by the specific policy, and through the futures individual can share the advantage. This is why a consistent environmental qualification and protection policy can make sense also in terms of present money and for the single individuals. This is even more so for the intermediate economies than for the post industrial ones.

This general assumption could be soundly assisted by quite a few examples. The cost of the Great Lakes recovery in the last fifteen years against the cost of a sound environmental policy enforcement in the previous 70. Taking into due account what has been permanently lost in the process. The cost of the recovery (if it will be ever achieved) of the Mediterranean Sea against the cost of a sound environmental policy enforcement since 1910. The cost of the Chernobyl cleanup......Bhopal.......Seveso.....You name it.

Another tragic example of the consequences of a rich and dirty development policy is at present given by the former USSR countries: extremely dangerous environmental conditions, way beyond the line of possible return. No richness. The rescue in course of the former communist industrial asset by western capitals and financing programs can be regarded as a novel form of colonial takeover. Neatly disguised.

 

An evaluation method for environmental protection technologies

One can rank environmental strategy choices according to several criteria:

capital return on the investment,
environmental results,
commercial value of the output,
time lapse,
geographical implications or fallout,
social burden,
cultural constraints and acceptability,
technical feasibility,
safety,
future values,
amenity,
quality of life,

...................

Some technologies do not eliminate the pollution: they just displace it to other countries, or shift the time dimension (delay the effects).

Choices that imply behavioural and cultural changes of the people and choices that imply technical changes on the installed hardware must be carefully distinguished. This to prevent induction of cultural changes before fixing more or less simple hardware shortcomings, or to know when you do it. It is generally assumed that capital return on the investment is the winning number. When you have got your money back and the environmental quality return with a feasible and socially acceptable technology, you are on the safe side of the cash flow. Not all the choices in the environmental control field are that clear for the decision maker.

Pollution control technologies need to be classified in a way that allows to properly allocate the burden of their capital and management. cost.

The problem is easy when the investment yields both the return on capital and the return on environmental quality in current financially sustainable conditions. It is less clear when the returns are yielded beyond current financially sustainable terms. Or when the size of the investment implies constraints on the national debt and multigenerational liability.

The geography limit is also a matter of concern: why should people living in Bandung pay for the water table recovery in Jakarta. Sometimes pollution is exported via climate effects from one continent to the other: typical example are the ozone layer damage, the greenhouse effect, the acid rains, the radioactive clouds. Sources may be very specific and clearly identifiable (Chernobyl, Three Miles Island, Ruhr, Mestre, Petrochemical refineries, paper factories, livestock farms, ESSO Valdez.....) or may be the result of diffuse behavioural patterns and habits (heating, traffic, air conditioning, urban solid waste and sewage).

The principle that those who do the mess should also do the cleaning is a good one when applicable: it may hide less trustworthy objectives such as trade barriers and protectionism (see Toepfer Law in Germany). Most of the times it is difficult to know which mess has been done and which cleaning has to be done by whom, where, and to organise things consequently.

Broadly looking at the various tools, incentives, taxes or penalties, one can see that they all belong to the hole fixing tools catalogue: running after thousand droplets because the main structural source is out of reach. Environmental cost accounting, internalisation, environmental cycle pricing, are the tools that will start the environmental renaissance. Waiting for the renaissance to come we have to make do with compromise, temporary provisions. If we cannot have a new economical set up let's try to twist the present set up to meet the needs with provisional fixes. The main scope of any type of fix is to get the money from the most consistent source. Where the consistency may be a function of the relationship with the polluting agent and with the damaged party. In direct words pollution control technology investments have to be supplied by those who produce the pollution and/or by those who suffer from it, or represent them. The two extreme situations see a very complex field in between.

The technology evaluation method has to solve this complexity.