meeting with the Mayors Taskforce for Jobs
from The Jobs Letter No.127 / 14 July 2000
- The Redesigning Resources Conference
- Redesigning Resources Website and Conference Report
- What is Natural Capitalism?
- Photos from the Hawken/Mayors meeting
At the REDESIGNING RESOURCES conference, held in Christchurch last month, 200
invited business, government, science, arts and community leaders spent two days in presentations and
workshops around the theme of Natural
The conference was hosted by the Christchurch Employers' Chamber of
Commerce and the Christchurch-based Recovered Materials
Foundation. It included presentations from Paul
Hawken (co-author of the book Natural
Capitalism), Ray Anderson (Chairman and CEO of the
Interface Corporation, one of the world's largest carpet companies), and New Zealand Prime Minister
Helen Clark (who shifted her weekly cabinet meeting in order to attend).
PAUL HAWKEN argues that the environment cannot be "saved" nor can unemployment
be "solved" as long as people cling to the outdated industrial assumption that the best business
strategy is to use more natural capital, and fewer people. He told the conference that moving the
economy toward greater resource productivity can drastically reduce the impact we have on the
environment, while at the same time creating more profitable businesses and increasing the overall levels and quality
Several members of the MAYORS TASKFORCE for
JOBS also attended the conference, and
took time for a special meeting with Paul Hawken to discuss sustainable cities, local government, and
the employment advantages that come from following a
Natural Capitalism agenda.
In this special feature, we give an essential
summary of Hawken's comments from this meeting.
- ON RE-IMAGINING CITIES
I spend most of my time with corporations yet the most interesting conversation for me
is about "cities", and how to re-imagine them. The fact is that cities are the basic unit of sovereignty in
the world they always have been, and still are. Cities are where the rejuvenation, and all the juice,
they are where the most imagination is, and where the most impact on people is. In
the next century, cities are where social entrepreneurship will be much more dynamic and interesting
than business entrepreneurship.
the next century, cities are where social entrepreneurship will be much more dynamic and interesting
than business entrepreneurship."
- The largest corporate sector in the world is cities. It's not insurance, not energy, not transport,
it's cities. And we forget that they are corporations. They don't have shareholders, but they certainly
But cities are just so much larger in scope and size than any other corporate sector, and yet they
are always seen as "other", and we don't include them with business. But, without exception, a city
of 100,000 people is far more complex than a company that turns over $100 billion in revenue. In
other words your city is more complex than Royal Dutch Shell or Exxon or IBM or whatever.
- ON FLOWS, LOOPS AND LEAKS
What all cities lack is the fact that they don't have a map of themselves. I don't mean a road
I mean that cities have no idea what their inputs and outputs really are. They do know perhaps
about their water, energy and things that they have direct responsibility for
but the fact is a city is a
very complex organism indeed, and what they don't have is a map of their
capital flows. Their capital flows are not just their natural capital flows, it's also the financial capital all the forms of capital that
are going in and out.
- Generally speaking, what you find is that cities range between
capital exporters and capital
concentrators. Cities that are capital concentrators, like Auckland, do very well. It doesn't mean
they don't have problems, it just means that they have a surplus of cash. But many cities are in fact
capital exporters and they have no idea why. They wonder why they have trouble maintaining their tax
base, why the kids are leaving, why their education is faltering, why the housing stock is slipping, etc.
And they wonder about this because they actually have no map of the capital flows in their city.
A city that is a capital exporter is just like an organism that is slowly starving itself. With people,
it's called anorexia
an anorexic eats just a little bit less every day than the amount of energy they
expend and they slowly degrade as an organism. First they become skinny but later it's a real internal
breakdown in terms of the organism until they die. Now, cities don't die that way but the fact is that
the analogy is perfectly apt.
" So when mapping the capital flows in a city you are really starting to look and ask: Where is
it leaking? Where's all the money going? Where's it coming in too? And when it comes in keep it.... A healthy city is like a healthy watershed. A healthy watershed receives water quickly, sucks it right
up and releases it slowly."
Whether cities are capital concentrators or capital exporters is something anyone can feel by looking
at the revenues, or population demand, or housing stock or things like that. But in fact there is no
map, there's no mechanism, software, or inventory that allows cites to really understand and measure
their capital flows, and get to see the changes that are occurring.
The problems attendant on capital exporters or concentrators are very different. The problems
of capital concentrators are growth and sprawl and noise and traffic and pollution etc. The cities who
are de-capitalising tend to have crime and unemployment and drugs, poor housing etc. But whether a city
is capitalising or de-capitalising, the fact is that in both cases the strategies to create a more healthy
city and more jobs is to actually the same. The strategy is to
close the capital loops, and to plug the
capital leaks. That's why it is important to understand what the leaks are.
- If you had a meter somewhere that told you how many miles to the gallon every car in your
city was getting per litre and you could see the amount of money that's being exported, say
from Christchurch, every second. This is happening in terms of the car stock, in terms of petrol
putting aside any mention of damage to the atmosphere and pollution. This information would give you a
picture of the true capital flow of what's going on in Christchurch. And you would be astonished.
The fact is the money goes through the dealer ... but it keeps going right out of this country to Japan,
to the rest of the world. The fact that money is being transacted is a good thing but the point is that
the transaction doesn't come back to New Zealand very much. Maybe they buy some lamb, maybe
they buy some wool
but the fact is it is not coming back to you.
- So when mapping the capital flows in a city you are really starting to look and ask: Where is
it leaking? Where's all the money going? Where's it coming in too? And when it comes in keep it.
Keep it and have it turn around more there in your city. This will raise more real income. And the more
people who are working, the better the tax base. And so you can actually lower taxes because your
gross taxable revenues are going up. All this reinforces the kind of action that you want to take on behalf
of social issues, environmental issues, and quality of life in the city.
- So a healthy city is one in which you look at all the capital flows and start to close the loops.
A healthy city is like a healthy watershed. A healthy watershed receives water quickly, sucks it right
up and releases it slowly. A sick watershed, whether it is forested or overgrazed, receives water slowly
... the rain runs right off because the sick watershed gives it up very quickly. A sick
economic watershed such as a city doesn't accept money very quickly. It accepts it slowly ... and the money goes
right out of the city the next day.
- ON ENERGY RETROFITTING
My colleagues and I have worked with cities to try to reverse capital flows. In the case of
energy, we have worked with a town in the United States where they have hot summers and cold winters
so there was a lot of air conditioning in the summer and a lot of heating in the winter. It has a large
population of people who were not that economically well-off, they could not afford the kind of housing
stock that was well insulated and energy-efficient. A great percentage of their income was going out on
their utility bills ... so of course that's money they're not spending on education, or on a lot of other
things. Furthermore, the energy utility was not in their town, it was a nuclear utility 200 miles away and so
that money was just gone
it didn't come back to town at all. Again, that's an unhealthy economic
- What we did is we worked with a window company, to establish a factory that would be
co-owned with the city. This company would retrofit all the substandard housing with thermal panes
that were manufactured in the city and then installed directly. Actually this was cheaper than buying
the windows through a dealer network, and it employed people in the city. The people whose houses
the windows were installed in had to pay nothing. In fact they were paid five hundred dollars for the
trouble and inconvenience of having all their windows replaced ... and also because the energy audit
showed that the amount of money the customers were spending on energy was far greater than the cost of
the retrofit even with interest payments.
We were going to use the power of the city to borrow money in the United States a city can
issue industrial development bonds which are tax deductible which have very low interest rates. So we
would use IDDs to finance the factory, finance the retrofit, and people would pay for the windows over
time but they would pay for it in the savings of energy that they were getting from having their houses
retrofitted ... which also included insulation and other types of energy conservation measures.
- So now what you have is the people in the houses having better and more comfortable
houses, and their utility bills were actually going down. The project was providing work in the town, and
people who were jobless were now being trained. We were upgrading their skills, so that they would have
skill sets that would be valuable after the town was retrofitted, which would take quite a number of
years. So the "wins" went right across, because we were literally plugging the energy leaks and closing
the capital flow loops as well.
- ON WATER AND CAR "PARKS"
The Environmental Protection Agency (EPA) mandated the same city to build a
secondary wastewater treatment plant. The EPA said that the water that was running off the streets was
polluted, which it was, because of cars. But it was going into the Tennessee River, which meant the city had
to meet the new Clean Water Act, which also meant they had to built a $100 million
secondary wastewater treatment plant.
Well, it was the last thing the city wanted. They wanted clean water, but they didn't want to spend
$100 million, and the last thing they needed was a higher tax rate. This is a city that had seen industry
leave, not come
and they were trying to make the city more attractive to business, not less attractive
with higher taxes.
And so again they came to us and asked: "What would you do using natural capitalism?" We studied
it and looked at it
and then we asked them a question: How were you going to tax the businesses
on their water run-offs? They replied that they were going to tax businesses by the square footage of
roof and parking lots. This makes sense the bigger the footprint, the bigger the water runoff , and
the more you pay a fair share. But we thought about it and said: Well, we think you should tax the runoff
by the gallon, not by the square foot. They asked: What's the difference? The answer is that the
businesses have no incentive not to have a runoff. There's no incentive at all.
- We showed them a plan to retrofit all of the parking lots in town. They were all classic
solid paved areas built with slopes starting in the middle and draining towards the edges so that the
water would go to the streets and not leave the cars sitting in water.
What we talked about is retrofitting them with permeable or pervious paving which is used in
industrial parks all throughout Europe. It is standard operating procedure over there right now but
somehow America never figured that out.
- At the same time we were doing work in the city on a design to make that part of the city into
a botanical garden. This area in Tennessee is actually an area of the greatest botanical biodiversity in
the United States. So that seemed like a good idea.
What we suggested is making the parking lots whether they be private or public into "parks"
that you park cars on. So not only was there pervious paving
but we also put very tough resistant
sedges and grasses in these tiles so that they take up a tremendous amount of water, and act to recharge
the groundwater. And in all the medians and perimeters of the parking lots, we planted trees that
were water-loving and fast-growing that also reflected the variety of trees that were once in the area.
We actually named them just like in a botanical garden
- The point is that if you did all this you wouldn't need a secondary wastewater treatment
plant. This retrofitting of parking lots means you're not contracting to a big business in San Francisco to
treat waste water in Tennessee. You're treating it right there using the ground, the earth, the rocks, the
which basically filter what pollutants are all in the water. So then we asked businesses: If
retrofitting your parking lots is cheaper than paying the taxes, would you do it? And they said: That's a
no-brainer, of course we'd do it!
- This retrofitting is a classic local job scheme. It means you're giving people work over years
and years of retrofitting
and it is good work, they're making beautiful places. They're not just working
in the streets and digging them up, which is okay, but I mean they're actually making beautiful places.
We suggested to the city that since they were going to pass a $100 million bond anyway (for the
secondary wastewater treatment plant) that had to be paid for in perpetuity
we suggested that they
pass a $10-15 million bond and this bond would be used to hire youth during the summer to maintain
the parking lots to trim the shrubberies, and the trees and the flowers and so forth, because this is
when the trees grow the fastest, and you're gonna have to do some trimming work. So not only would you
be employing in the summer the youth in the city, they'd also be learning the unique botany of the region.
- ON JOBS IN SUSTAINABLE CITIES
These examples give you a way of thinking about a city as an organism, how to think about
the flows, how to imaginatively close the loops, plug the leaks, and how you create more jobs and
you reduce taxes or don't raise them. You also employ more people in meaningful living wage jobs and
you retain the money that the city has within the city.
The normal idea is that, if you want to create jobs
you've got to spend a lot of money. People
usually need money to make jobs. But the fact is these examples are taking the money people were
already spending on their cities and re-circulating it in an entirely different ways to create local employment.
And when you look at these examples, they end up with better cities to live in, they're better cities
to walk in, they're better cities for business, and they raise property values. So again, the "wins" are
so endless. It sounds ridiculous, but in fact as you can tell here that the solutions are cheaper than
the problems as they existed. And yet you create jobs.
Source Paul Hawken meeting with the Mayors Taskforce for Jobs, Christchurch Conference Centre, 27 June 2000
growing the economy while healing the environment
Christchurch Conference Centre
2527 June 2000
- Many participants at the Redesigning Resources
conference believe that Natural
Capitalism is a ground-breaking paradigm for the new economy and one which could transform our
fundamental notions about commerce and its role in shaping a sustainable future. The conference organisers
repeated the recommendations of many world leaders, such as President Bill Clinton, who were heralding
the growing corporate interest in its principles. (Tachi Kiuchi, Managing Director of Mitsubishi
Electric Corporation and Chairman of The Future 500, describes
Natural Capitalism as "a manifesto for
the second industrial revolution
- The Christchurch conference brought together six leading companies and organisations
who agreed to be "case studies" in workshops on how these businesses could be redesigned under a
natural capitalism agenda.
These included: The Warehouse (NZ's largest retail group), Macpac (manufacturers of outdoor
and wilderness equipment), Landcare Research (a NZ Crown Research Institute), Orion NZ (A
national electrical network management company), the Christchurch City Council, and the Shire of Yarra Ranges (the largest metropolitan council in Melbourne, Victoria).
The workshops at the conference were challenging and creative
and sometimes combative
and argumentative. It's not every day that six major companies and organisations open themselves up
to direct and frank feedback from a cross-section of business, government and community leaders.
But the Redesigning Resources organisers were clear from the outset that this conference was
also designed to be a catalyst for action. At the end of the two-day workshops, these six "case
study" organisations committed themselves to genuine progress on their own natural capitalism agenda.
They drew up specific goals covering a two-year timeframe, and progress on these goals will be reported
on in the Resigning Resources website
- The Mayors from the Mayors Taskforce for Jobs who attended the Christchurch forum
included: Sukhi Turner (Dunedin), Garry Moore (Christchurch), Claire Stewart (New Plymouth), Jenny
Brash (Porirua), Michael McEvedy (Selwyn), Jill White (Palmerston North), Tim Shadbolt (Invercargill)
and John Chaffey (Hurunui).
- For more information on the Redesigning
Resources conference, contact Mark Prain at
Redesigning Resources, P.O.Box 6320, Upper Riccarton, Christchurch phone 03-341-1959
- What is Natural Capitalism? Hawken says it's what capitalism might become if its
largest category of capital the "natural capital" of ecosystem services were properly valued.
Hawken and his co-authors, Amory and Hunter Lovins, describe a journey towards natural capitalism
which involves four major shifts in business practices:
Dramatically increase the productivity of natural resources.
" Reducing the wasteful and destructive flow of resources from depletion to pollution represents a
major business opportunity. Through fundamental changes in both production design and technology,
farsighted companies are developing ways to make natural resources energy, minerals, water,
forests stretch 5, 10, even 100 times further than they do today. These major resource savings often
yield higher profits than small resource savings do and not only pay for themselves over time but in
many cases reduce initial capital investments."
Shift to biologically inspired production models (bio-mimicry).
" Natural capitalism seeks not merely to reduce waste but to eliminate the very concept of waste.
In closed-loop production systems, modeled on nature's designs, every output either is returned
harmlessly to the ecosystem as a nutrient, like compost, or becomes an input for manufacturing another
product. Such systems can often be designed to eliminate the use of toxic materials, which can hamper
nature's ability to reprocess materials."
Move to a solutions-based business model.
" The business model of traditional manufacturing rests on the sale of goods. In the new model, value
is instead delivered as a flow of services providing illumination, for example, rather than selling
light-bulbs. This model entails a new perception of value, a move from the acquisition of goods as a
measure of affluence to one where well-being is measured by the continuous satisfaction of changing
expectations for quality, utility, and performance. The new relationship aligns the interests of providers and
customers in ways that reward them for implementing the first two innovations of natural capitalism
resource productivity and closed-loop manufacturing."
Reinvest in natural capital.
" Ultimately, business must restore, sustain, and expand the planet's ecosystems so that they can
produce their vital services and biological resources even more abundantly. Pressures to do so are
mounting as human needs expand, the costs engendered by deteriorating ecosystems rise, and the
environmental awareness of consumers increases. Fortunately, these pressures all create business value."
Source Harvard Business Review (May-June 1999)
For a fuller overview of the principles of Natural Capitalism,
The Jobs Letter No.61), or visit the Natural Capitalism website at www.natcap.org.
For specific comments by Paul Hawken on employment issues from a Natural Capitalism
perspective, see The Jobs Letter No.118 (our special issue on "Jobs from Waste").
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