Blog
28.November 2000 - 00:00
Sticks & Carrots: Legislators providing incentive
DRAFT SPEECH by Eija-Riitta Korhola:
The aim of most environmental policies and the message from the environmental NGO's so far has been, in brief, that both producers and consumers should act more responsible. The target has been industrial operations with less environmental burden. It has not been simply due to greed of the producers or nonchalance of the consumers that the market choices have not been in uniform with the good advice given by the ecologically worried.
Choosing steel and copper nails with almost identical prices in a hardware shop, it may have never occurred to the consumer that the ecological burden of a single copper nail is equivalent to more than 20 steel ones'. The only option for the producer and shopkeeper to inform the customer is to give some product information; while so far, political decision making has been responsible for the fact that direct and indirect expenses on labour are much more significant in manufacturing (for example the nails) than the cost of raw materials. Thus, the small part of a nail's price having anything to do with the ecological cost has been hidden in the shadow of the much bigger part consisting of expenses and taxes on human resource in production, transport and retail.
To reveal this kind of information about the environmental expenses, the idea of an ecological backpack has been formed. It simply adds up, in kilograms or tons, the amount of organic and non-organic materials, soil and minerals, water and air, needed in the production, use and disposal of any service or product. The best known examples are a golden ring, with the ecological backpack of up to 3000 kg, and a pair of jeans, with the 300-kg ecological burden.
Promoting individual producer responsibility means easing the weight of the backpack. With incentive for better design, less is needed to produce more. Therefore, companies acting eco-efficiently do not really need the carrots provided by society–they can afford to buy their own carrots, or whatever it is they fancy.
This is, of course, nothing new. Henry Ford said already in 1926: "You must get the most out of power, out of the material, and out of the time." Even today business managers know that competing power is achieved through efficiency, which actually means eco-efficiency. 3M, for example, has saved almost one billion Euro through pollution prevention projects, and other companies, too, claim to have similar results.
Our Common Future, a report by United Nations' World Commission on Environment and Development in 1987, confirmed the idea that politicians should encourage industries to produce more with less.
It was followed by the concept of eco-efficiency, brought to the Earth Summit in Rio by World Business Council for Sustainable Development, representing some 50 most powerful companies in the world. Consequently, OECD, in 1996, and the European Union in UN Committee for Sustainable Development 1997, have been in favour of eco-efficiency.
The concept of eco-efficiency has already changed the orientation in almost any environmental work, from focusing on emissions, discharges and pollution, to the analysing of the life cycle. In other words, from mending damages to prevention; and from sporadic details to a more holistic perception. Yet, eco-efficiency can easily be like any trendy catchword: we need a more operational, concrete and action orientated approach. Measuring systems have been developed to help both political and every-day decision-makers see more clearly the ecological impacts of their choices. The Wuppertal Institute in Nordrhein-Westfalen, for instance, has produced a measure unit for Material Input Per Service-unit, MIPS, in the beginning of the 1990s. Using MIPS–or mipsing–helps us compare the energy and materials needed for one unit of desired benefit, before, during and after this benefit is consumed. In other words, it tells us how heavy the ecological backpack is per each time the service is used. Mipsing reveals, for example, that you should use a shopping bag made of cotton more than two hundred times before you are on an equal level with a plastic bag.
In a genial way, MIPS manifests the possibilities of consumer choice even though the mechanisms of market pricing still are incomplete in internalising external costs. Even better, it is as free as possible from ecological trends, political fashion and green taboos. I admit, it is not a perfect meter, because it limits itself to quantitative criteria, but anyway; it is a valuable, additional approach and very welcome as such.
In the example of the shopping bag, it informs the consumer: If you cannot keep and use the cotton bag for more than half a year it will be, surprisingly enough, more ecological not to buy another "natural" cotton bag, but use the notoriously unecological plastic bag. Or the consumer might understand the ecological burden of the cotton bag and take better care of it.
Mipsing is especially useful to SMEs who might have problems with accurate ecological accounting in modern network economy. More rough, mipsing is close enough for the needs of the SMEs. And thanks to mipsing, the environmental NGOs start to realise that sometimes recycling is less ecological than the use of virgin materials.
On macro-level, comprehensive accounts of the flow of materials in the economy have been created, in order to provide better understanding of the dynamics and trends of the production processes. This kind of consistent theory of industrial (lack of) ecology is the base to start striving for change. In the next 20 to 30 years, the aim is to produce the same amount of services with only a quarter of the current consumption of materials and energy. This is called Factor 4. In the long run, in 50 years, one should be able to reduce it to one tenth, achieving Factor 10. If a Nobel price winner in Economics could define: "In the long-run, we all are dead" – there is, with current perspectives, hope for some survivors, too.
The idea of eco-efficiency and mipsing can be expressed with three Rs: Reduce, Reuse and Recycle. These three words are the spine of the EU waste hierarchy, too. It is great, but is it enough? Is it not just slowing down, but still continuing in the old direction? Less waste is produced, fewer resources are used, less poison is released, and all this is effecting our health and security more slowly. Yet, the negative effects work for worse, no doubt.
Critics have said that as soon as there is a way to produce more with less, production increases and accelerates. Developing countries, even if they were ideally supposed to benefit from the globally more just Factor X -scheme, have protested, too, in fear of losing their ground in raw material markets.
For obvious reasons, political ambition cannot stop here. We did not even have proper use for the sticks and carrots, since it proved to be so profitable for companies themselves to be eco-efficient. Well, we could use the extra time provided by the slow-down of the ecological crises and start another industrial revolution.
How would that change things, what would the new industrial revolution be like? Extreme scarcity and an ascetic lifestyle? Returning to the quality-of-life of the pre-industrial age where scarcity determined the value of exchange and only the elite had the power to purchase? This is the sound of the more realistic visions of most environmental activists, unless of course, they opt for a utopia without being able to show the way there.
But this is not the way nature works. Nature is highly industrious, utmost productive, astonishingly creative and even wasteful, but always most effective and functional. This is the scent of the truly natural industrial production and the model for the ecological production design! Nature does not follow "integrated production policy" in the cycle of cradle-to-grave, but rather from cradle-to-cradle.
Nature challenges us to re-think everything: from the relation between buying a service and ownership to what really is the desired benefit in the service provided by producer; from local sharing to global trade.
The word "economy" comes from the Greek words oi-konomia, good household. Unlike us, in ancient Greece it was close to impossible to think about economy without the context of ethics and politics. (According to Aristotle) Economy was, like the arts of leading wars and rhetoric, part of political science, which had only one aim: the human wellbeing.
I could imagine Robert Schuman, if he had the opportunity to make another declaration in the current European Union, to find most of the 50-year-old tools still useful. But, unlike then, he might not consider the biggest threat to our safety to be any more the economical structures promoting military antagonism. Rather he might think that the structures of production are the biggest threat to our health and to the ecological balance.
In the spirit of Schuman, we could start another industrial revolution, with three Es: Equity, Economy, and Ecology. Those principles should bring about the industrial change: equity refers to fair trade and social justice, economy refers to market viability and ecology refers to environmental intelligence. To me, this feels like the end of antagonism, too. Then there is no need to use the stick anymore for anything but showing the right path to any eventual free rider. Neither there is need to feed industry with the few carrots we have. Instead, we should give them to institutions like Wuppertal, providing us with new fresh ideas, and with more up-to-date information on phenomena like climate change.
"The world will not evolve past its current state of crisis by using the same thinking that created the situation", said Albert Einstein. This is true. Our toolbox might well be useful if only we had the information and could think in a new way.
1st European parliamentary conference on the environment, 28.11.2000
DRAFT SPEECH by Eija-Riitta Korhola:
The aim of most environmental policies and the message from the environmental NGO's so far has been, in brief, that both producers and consumers should act more responsible. The target has been industrial operations with less environmental burden. It has not been simply due to greed of the producers or nonchalance of the consumers that the market choices have not been in uniform with the good advice given by the ecologically worried.
Choosing steel and copper nails with almost identical prices in a hardware shop, it may have never occurred to the consumer that the ecological burden of a single copper nail is equivalent to more than 20 steel ones'. The only option for the producer and shopkeeper to inform the customer is to give some product information; while so far, political decision making has been responsible for the fact that direct and indirect expenses on labour are much more significant in manufacturing (for example the nails) than the cost of raw materials. Thus, the small part of a nail's price having anything to do with the ecological cost has been hidden in the shadow of the much bigger part consisting of expenses and taxes on human resource in production, transport and retail.
To reveal this kind of information about the environmental expenses, the idea of an ecological backpack has been formed. It simply adds up, in kilograms or tons, the amount of organic and non-organic materials, soil and minerals, water and air, needed in the production, use and disposal of any service or product. The best known examples are a golden ring, with the ecological backpack of up to 3000 kg, and a pair of jeans, with the 300-kg ecological burden.
Promoting individual producer responsibility means easing the weight of the backpack. With incentive for better design, less is needed to produce more. Therefore, companies acting eco-efficiently do not really need the carrots provided by society–they can afford to buy their own carrots, or whatever it is they fancy.
This is, of course, nothing new. Henry Ford said already in 1926: "You must get the most out of power, out of the material, and out of the time." Even today business managers know that competing power is achieved through efficiency, which actually means eco-efficiency. 3M, for example, has saved almost one billion Euro through pollution prevention projects, and other companies, too, claim to have similar results.
Our Common Future, a report by United Nations' World Commission on Environment and Development in 1987, confirmed the idea that politicians should encourage industries to produce more with less.
It was followed by the concept of eco-efficiency, brought to the Earth Summit in Rio by World Business Council for Sustainable Development, representing some 50 most powerful companies in the world. Consequently, OECD, in 1996, and the European Union in UN Committee for Sustainable Development 1997, have been in favour of eco-efficiency.
The concept of eco-efficiency has already changed the orientation in almost any environmental work, from focusing on emissions, discharges and pollution, to the analysing of the life cycle. In other words, from mending damages to prevention; and from sporadic details to a more holistic perception. Yet, eco-efficiency can easily be like any trendy catchword: we need a more operational, concrete and action orientated approach. Measuring systems have been developed to help both political and every-day decision-makers see more clearly the ecological impacts of their choices. The Wuppertal Institute in Nordrhein-Westfalen, for instance, has produced a measure unit for Material Input Per Service-unit, MIPS, in the beginning of the 1990s. Using MIPS–or mipsing–helps us compare the energy and materials needed for one unit of desired benefit, before, during and after this benefit is consumed. In other words, it tells us how heavy the ecological backpack is per each time the service is used. Mipsing reveals, for example, that you should use a shopping bag made of cotton more than two hundred times before you are on an equal level with a plastic bag.
In a genial way, MIPS manifests the possibilities of consumer choice even though the mechanisms of market pricing still are incomplete in internalising external costs. Even better, it is as free as possible from ecological trends, political fashion and green taboos. I admit, it is not a perfect meter, because it limits itself to quantitative criteria, but anyway; it is a valuable, additional approach and very welcome as such.
In the example of the shopping bag, it informs the consumer: If you cannot keep and use the cotton bag for more than half a year it will be, surprisingly enough, more ecological not to buy another "natural" cotton bag, but use the notoriously unecological plastic bag. Or the consumer might understand the ecological burden of the cotton bag and take better care of it.
Mipsing is especially useful to SMEs who might have problems with accurate ecological accounting in modern network economy. More rough, mipsing is close enough for the needs of the SMEs. And thanks to mipsing, the environmental NGOs start to realise that sometimes recycling is less ecological than the use of virgin materials.
On macro-level, comprehensive accounts of the flow of materials in the economy have been created, in order to provide better understanding of the dynamics and trends of the production processes. This kind of consistent theory of industrial (lack of) ecology is the base to start striving for change. In the next 20 to 30 years, the aim is to produce the same amount of services with only a quarter of the current consumption of materials and energy. This is called Factor 4. In the long run, in 50 years, one should be able to reduce it to one tenth, achieving Factor 10. If a Nobel price winner in Economics could define: "In the long-run, we all are dead" – there is, with current perspectives, hope for some survivors, too.
The idea of eco-efficiency and mipsing can be expressed with three Rs: Reduce, Reuse and Recycle. These three words are the spine of the EU waste hierarchy, too. It is great, but is it enough? Is it not just slowing down, but still continuing in the old direction? Less waste is produced, fewer resources are used, less poison is released, and all this is effecting our health and security more slowly. Yet, the negative effects work for worse, no doubt.
Critics have said that as soon as there is a way to produce more with less, production increases and accelerates. Developing countries, even if they were ideally supposed to benefit from the globally more just Factor X -scheme, have protested, too, in fear of losing their ground in raw material markets.
For obvious reasons, political ambition cannot stop here. We did not even have proper use for the sticks and carrots, since it proved to be so profitable for companies themselves to be eco-efficient. Well, we could use the extra time provided by the slow-down of the ecological crises and start another industrial revolution.
How would that change things, what would the new industrial revolution be like? Extreme scarcity and an ascetic lifestyle? Returning to the quality-of-life of the pre-industrial age where scarcity determined the value of exchange and only the elite had the power to purchase? This is the sound of the more realistic visions of most environmental activists, unless of course, they opt for a utopia without being able to show the way there.
But this is not the way nature works. Nature is highly industrious, utmost productive, astonishingly creative and even wasteful, but always most effective and functional. This is the scent of the truly natural industrial production and the model for the ecological production design! Nature does not follow "integrated production policy" in the cycle of cradle-to-grave, but rather from cradle-to-cradle.
Nature challenges us to re-think everything: from the relation between buying a service and ownership to what really is the desired benefit in the service provided by producer; from local sharing to global trade.
The word "economy" comes from the Greek words oi-konomia, good household. Unlike us, in ancient Greece it was close to impossible to think about economy without the context of ethics and politics. (According to Aristotle) Economy was, like the arts of leading wars and rhetoric, part of political science, which had only one aim: the human wellbeing.
I could imagine Robert Schuman, if he had the opportunity to make another declaration in the current European Union, to find most of the 50-year-old tools still useful. But, unlike then, he might not consider the biggest threat to our safety to be any more the economical structures promoting military antagonism. Rather he might think that the structures of production are the biggest threat to our health and to the ecological balance.
In the spirit of Schuman, we could start another industrial revolution, with three Es: Equity, Economy, and Ecology. Those principles should bring about the industrial change: equity refers to fair trade and social justice, economy refers to market viability and ecology refers to environmental intelligence. To me, this feels like the end of antagonism, too. Then there is no need to use the stick anymore for anything but showing the right path to any eventual free rider. Neither there is need to feed industry with the few carrots we have. Instead, we should give them to institutions like Wuppertal, providing us with new fresh ideas, and with more up-to-date information on phenomena like climate change.
"The world will not evolve past its current state of crisis by using the same thinking that created the situation", said Albert Einstein. This is true. Our toolbox might well be useful if only we had the information and could think in a new way.
1st European parliamentary conference on the environment, 28.11.2000