BUSINESS AND ENVIRONMENT: PROBLEMS AND OPPORTUNITIES Professor Norman Myers

1. BUSINESS AND ENVIRONMENT: PROBLEMS AND OPPORTUNITIES Professor Norman Myers

2. AGENDA • Environmental trends and costs • Sustainable businesses • Eco-technologies; techno-breakthroughs • Businesses and the "triple bottom line • Roadblocks: "perverse" subsidies • Decline of materialism? • Wealth = wellbeing? • Needed: a new business vision

5. OUR ENVIRONMENTAL IMPACTS • We consume over half of available freshwater and of net plant growth. • We have degraded 20 million sq. km. of land (= 2 x U.S.) • We are even dislocating our climate. • In 1960 we exploited 70% of our planet's resources, in 2000 120%. During 1992-2002: • People lacking safe drinking water: 1.1 billion to 1.2 billion • People in deep poverty rose from 1.1 billion to 1.3 billion. • Carbon dioxide emissions increased by 11%. • Annual increase in human numbers fell from 90 million to 77 million.

6. ECOLOGICAL FOOTPRINTS World average 2.3 Global Hectares (GH) per person, World’s biocapacity 1.9 GH, deficit 0.4 GH Japan 4.6 and 0.8, deficit 3.8 GH United States 9.6 and 5.8, deficit 3.8 GH Russia 4.2 and 5.1, surplus 0.9 GH

7. CHEAP/COSTLY FOOD A typical meal item in the United States travels at least 1500 kmbefore it reaches a dinner plate. If the full cost of all fossil fuels for transportation is added onto the price,a California lettuce on a New Yorker's table needs tens of times as much fossil fuel energy as its food energy. During the last forty years whilepopulation has doubled, the value ofinternational trade in food has tripled, and theweight of food shipped between countries has quadrupled.

8. HIDDEN COSTS OF CONSUMPTION Over 90% of materials and resourcesharvested or displaced in natureare wastedwhile producing food, machines, vehicles, etc. In the United States, a mere 1% of raw materials end up in products that are still used six months later, the rest being junked. The global community needs to cut its use of natural resources by 50%,while allowing for more people with more demands. Developing countries lack the technologies for 50%, so developed countries should aim for a 90% cutback.

9. SUCCESS STORIES 1: BUSINESSES CUTTING GHGs During the 1990s,L'Oreal, the world's largest cosmetics manufacturer, increased production by 60% but decreased GHG emissions by 44%, largely through energy conservation. Johnson & Johnson will cut GHGs by 7% during 2000-2010, Kodak by 20% during 2000-2004, Alcoa by 25% during 1990-2010, DuPont by 65% during 1990-2010 (45% already). But the United States as a whole has increased its GHGs by 16%, faster than virtually any other advanced country.

10. SUCCESS STORIES 2: BUSINESSES CUTTING CO2 In 1993 a U.S. business lobby set up the Global Climate Coalition to stop action on climate change. In 2000 it closed its doors because of declining support. Toyota, BP Amoco, Shell, DuPont, Enron and 15 other corporations have formed a Business Environmental Leadership Council to tackle global warming. They plan to reduce GHGs by 15% during 1990-2010.

11. SUCCESS STORIES 3: SUSTAINABLE PRODUCTION Unilever, the world's largest processor of fish, sells fish products only from certified sustainable sources. Share of the top 100 corporations producing sustainability reports: Japan 72%, UK 49%, USA 36%, Germany 32%, France 21%.

12. MICROCHIPS In that archetypal product of the Industrial Age, the car, materials form 40% of volume. In that strategic product of the information age, the microchip, they make up 0.03%. All today's microchips would fit inside a jumbo jet, and by e.g. enabling people to work at home, can eliminate the need to go from here to there in the first place. The microchip can form the basis of much future consumption since it is a key ingredient in low-volume and high-value products such as computers, videos, etc.

13. FACTOR FOUR Using today's eco-technologies, everybody could enjoy twice as much material well-being while using only half as much raw materials and energy and causing only half as much pollution and other forms of waste.

15. TECHNO-ADVANCES ALREADY HERE • Fuel-cell cars, with plug-in electric generators • Buildings that “manufacture”solar power, oxygen and water • Weeds supplying powerful pharmaceuticals • Cellulose-based plastics that are strong, and recyclable • Roofs, windows and roads serving as solar-electric collectors • Wood: all our wood needs could be grown in an area the size of Honshu

17. OUR CONSUMPTION OF MATERIALS We need to cut materials consumption worldwide by at least 50% To allow developing countries to develop, advanced economies need to cut by 90%

18. INTERNET The Internet economy replaces warehouses with supply-chain software, paper with electrons, and trucks with fiber-optic cable. This makes for large energy savings and a very different type of economic growth. Every minute of driving to shops uses twenty times the energy of a minute spent shopping on-line.

19. NEW DEMANDS ON BUSINESS * energy shortages * water shortages * changing government policies e.g. tax shifting * global warming * globalization, especially the Internet * major surprises The biggest surprise ahead will be no surprises. Vision?

20. THE NEW CONSUMERS Well over one billion people in 17 developing and 3 transition countries have sufficient income to rank as decidedly middle class. Theiraggregate consumption power, in purchasing power parity, matches that of the United States. They represent the biggest consumption outburst ever known --and hence the biggest new market ever known. The leader,China,may well become the world's biggest economywell before 2020.

25. U.S. GENUINE PROGRESS INDICATOR 1950-2000

34. ROCKY MOUNTAIN INSTITUTEThe Institute's house and office at over 2000 meters/6500 feetare heated and lighted only by solar power and energy conservation,even though winter temperatures often reach -40 degrees C. Inside is warm enough to grow bananas, and RMI even sells surplus electricity to the national grid. The building saves 99% in space/water heating and 90% in electricity. The 1983 heat-trapping measures cost less than the boilers and stoves eliminated, with savings repaid within 10 months.

36. MARKET GROWTH FOR CLEAN TECHNOLOGIES, 2000-2010 ($billions) Technology2000200520102000-2010 Fuel cells 0.2 2.5 10 50 times Hybrid/ fuel-cell vehicles 2 10 48 24 times Solar photovoltaics 2.5 7.5 24 10 times Wind power 4 13 44 11 times

37. THE BIGGEST CHALLENGE AHEAD? Is materialism no longer so attractive? In 1960 only one third of Americans were "very happy". Despite a doubling of per-capita consumption today, The one third has hardly increased. The Voluntary Simplicity movement has grown in certain areas to include 28% of local people. More than half of all Americans agree they must accept "inevitable changes in lifestyle" and even "reduced consumption". Consider the scope for sudden shifts in consumption patterns: during a recent decade, 55 million Americans gave up smoking.

38. WEALTH AND WELLBEING Many people in rich countries increasingly ask if greater wealth must necessarily lead to greater wellbeing. Two thirds would rather see the environment improve than have more economic growth and personal spending money. Developed-world citizens favoring less consumption: more than 60%. Highest is Japan with 80%, then North America 67% and Western Europe 62%. Those favoring less consumption of electricity 83%, of paper 81%, of gasoline and other fuels 73%, of water 71%, and of food 65%.

39. SUSTAINABLE SOCIETIES AND PUBLIC OPINION • Hopeful signs: • 50 million "cultural creatives" in the United States alone. • Socially Responsible Investment from 1% of managed assets to 15% in a single decade. • The Voluntary Simplicity Movement. • Cutting-edge technologies like clean/renewable energy and hybrid cars.