By Duncan KinneyContinuing our recent tradition of reviewing classic business books we come to an extremely appropriate book given the months theme of meaningful work and green jobs, Natural Capitalism.

This inspiring and almost unrealistically optimistic book defines natural capitalism as the economic practice of assigning a cost and value to the use, maintenance, depletion and restoration of natural resources and ecosystems. This dense, well documented book is packed with stories and anecdotes of how entrepreneurs, companies and organizations are realizing the value of natural capital and incorporating it into their business. If you want to save the world and make money you’re going to need an understanding of the principles espoused in this book. The four main principles being;

• Radical resource productivity – Getting much, much more from less will be more important than ever.
• Biomimicry – Design systems around nature. Nature doesn’t truck it’s garbage 200 miles away to end up in a landfill. From the book, “Spiders make silk strong as Kevlar but much rougher, from digested crickets and flies, without needing boiling sulfuric acid and higher temperature extruders. The abalone generates an inner shell twice as tough as our best ceramics, and diatoms make glass, both processes employing seawater with no furnaces. We may never grow as skillful as spiders, abalone, diatoms, or trees, but smart designers are apprenticing themselves to nature to learn the benign chemistry of its processes.”
• Service and flow economy – Shift the perception of wealth from good and purchases to valued desires and satisfying human needs. Don’t sell your product, become a deliverer of a service with long-lasting, upgradeable durables. Interface Carpet leases floor covering services rather than selling carpet. This also makes makes manufacturers responsible for their waste instead of downloading it to the consumer.
• Investing in natural capital – Develop economies and markets that enhance and restore the environment.

The connection between The Geography of Hope (a previously reviewed book) and Natural Capitalism is unmistakable. Both are optimistic enviro-screeds focusing on the business end of the equation. While Chris Turner focuses on telling stories in Hope, Natural Capitalism is much more focused on concepts and real world examples.

An important concept to take away would be what the book calls tunneling through the cost barrier. Traditional thought holds the more you want to save on a resource the more you will pay for each increment of saving. Let’s use the example of building a home. If you super insulate your house, using energy efficient windows and maximize passive solar heating your upfront costs will be high. However if you do a good enough job you can remove the need for a furnace. The lifetime cost of heating the home has now dropped very close to zero and you get one happy homeowner. This idea can be applied to to many different processes across various industries. Inertia keeps far too many wasteful and inefficient practices going.

A lot of what is written about is just straight up common sense; eliminating waste, energy efficiency, resource efficiency, integrative holistic design and closing the materials loop. These ideas are not new but when put out there with such thought and passion it’s hard to understand why these ideas aren’t ubiquitous.

I swung drastically from quite high to very low in reading the book. They’ll drop some terrible stats about the loss of topsoil then follow up with an intriguing anecdote about an entrepreneur growing watermelons in the a desert with something called subsurface drip irrigation. Most of the innovations talked about seem frustratingly out of reach for mainstream adoption despite the quality of the idea.

There are definitely parts of the book that show their age (the book was published in 1999) and parts that are just flat out wrong. In Chapter 12 specifically, the authors are extremely excited about the possibilities of the Kyoto Accord and spend the chapter making projections about the future of carbon trading that just didn’t come to pass. The authors, specifically Amory Lovins, go on about ultra-light, ultra-strong Hypercars. Of course after publishing the book domestic automakers pumped out thunderingly inefficient SUVs for the next nine years.

The chapter on economic and market theory offers an excellent critique of the subject. Transferring taxes from labour to resources is such a basic idea that it’s shocking it’s not in place. Taxing the pollution that ends up in our water table is a much better idea than taxing my income.

I’ll end off with this quote from the book.

“How is it that we have created an economic system that ells us it is cheaper to destroy the earth and exhaust its people than to nurture them both?”

The creation of an economy that realizes the hundreds of trillions of dollars of value present in our atmosphere, the soil and water should be the economy that our grandchildren should inherit.

This entry was posted on Saturday, May 1st, 2010 at 4:38 am and is filed under Reviews. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.