Journal of Sustainability

Dibyendu De, Design Thinker, RMCPL, Kolkata, dde337@gmail.com

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Example 3 on Social Sustainability: Why Would an Elephant Waltz?

Once upon a time a large industrial group wanted to set up a large, modern and efficient cement plant as a greenfield project. It was an ambitious plan that would help the company capture a big untapped market. Hence, they wanted to bring up the plant as fast as possible.

So, first things first. They got the land and the limestone mine of relatively good quality. They also got a CEO who they thought would deliver the project on time.  Since it was a greenfield project they thought that a very disciplined person would fit the bill nicely. A senior retired army Colonel was selected for the purpose.

As soon as he was appointed, he set about the task with all seriousness of an army officer. He understood about projects and engagements. He has done that all his life in the army. He understood command and control very well. That was his forte. Though he was an engineer by training he had absolutely no idea what a cement plant was made of.

To deliver a quality project in time, he hit upon a splendid plan backed up by an 'infallible' logic. The logic was that he would get the best machines or sub-systems of the plant from the best suppliers of the world and then he would just put them together so that the plant performs right from the first day. How would he understand what was the 'best'? He would survey the existing plants go through their records of performance and reliability, collect data to find out what part or sub-system of the system worked best for Plant X and then what worked best for Plant Y and so on. Reliability would be his benchmark and vision.  

So he decided that he would buy the kiln from supplier A and the cooler from supplier B and the hammer crusher from supplier C and the conveying system from supplier D and the cement mill from supplier E and so on. When he placed his ideas before the board they found his ideas to be wonderful. They were convinced that it would take the minimum time for procurement and set up since they would avoid lengthy negotiations and hassles if they decided what to buy and from whom to buy these from. After all it would not pose any problem. They were buying the best things from the best possible suppliers around the world. 

The Colonel went about the task with gusto, precision, efficiency and great care carrying just the right attitude of going to war. None needed to teach him what 'war footing' was.

Soon, the best pieces of equipment and sub systems arrived at site and were put together with great efficiency. Time flew past quickly. In no time the modern cement plant was set up. His bosses were extremely happy with the good job done and awarded the Colonel a good bonus and a promotion for completing the project much before time and within budget. Everyone was happy and the plant began operating much before the planned date. It was key to capturing the untapped market before others got in.

But very soon a problem emerged. The plant was unable to produce the designed capacity at all. They kept trying harder and harder but the plant refused to change its behavior. They coaxed people to work smarter and come up with good ideas. Nothing happened. They called in experts. The experts took their fees but the system did not improve. They started training people to no good effect. Then they brought more or the best people to leadership positions. But they also could not make the desired change. People were sacked. New blood was inducted. The system did not budge an inch. 

Another problem surfaced. The plant suffered innumerable breakdowns - one after the other. People were busy fixing things up as soon as things failed. They kept doing this for years.

12 years passed. The fate of the plant was sealed. Or so it seemed. People were blamed and they were demoralized. The President of the plant was sacked. New leaders took over. A time came when people stopped talking about this plant about which they were so proud of a few years back. People fought. Blamed each other. Worked hard. And prayed often. 

What was happening? What went wrong?

The problem precisely lay in the interaction of the parts of the system. They did not 'dance in harmony' or simply did not match or fit together as one whole. Why was that?

For example, they had the best kiln. Now this best kiln retained more heat than other kilns and therefore was energy efficient and reliable. It meant that the kiln lost less energy and most of it was used to form the clinker. That was good news. Then what was the bad news...?

The clinker that came out of the kiln went over a 'cooler' whose function was to cool the clinker. Now this cooler was not designed to match the performance of this kiln or in other words the cooler was not designed to handle the temperature of the clinker that came out this kiln. So by the time the clinker passed over the cooler it did not cool sufficiently enough. After the clinker passed the cooler it entered the hammer crusher. With more than the expected temperature of the 'cooled' clinker the hammer crushers performed badly. This was because the hammers wore out in no time owing to the 'hot' clinker. They were not designed to handle these 'hot' clinkers. The clinkers were still hot enough after being broken into smaller pieces. Now the broken clinker traveled over a rubber belt conveyor (RBC) to the silo for temporary storage. The RBC wasn't designed to handle the additional temperature and the rougher edges of the clinkers (produced by the bad performance of the crusher). So they often went down necessitating frequent maintenance and replacement and stoppage of the entire system. 

Since the production pressures were up the clinker did not stay in the silo for a long time (that also caused defects in the silo) the clinker was taken out in relatively hot condition to be fed to the cement mill. And surely there too, it produced frequent problems. The ripples of the systemic problem were felt right up to the bag house (pollution control mechanism). In fact it was everywhere and the whole plant looked so dirty and dusty that people often did not like to work in such places.

So, in short, every part of the system got affected and strange system behaviors abounded in plenty (emergence). Such emergence inhibited production and the plant could never run as desired. Everyone was busy looking at the parts of the system and trying to improve the parts and make them very efficient. As expected it never worked. The Elephant refused to dance.

A time came when a very talented engineer was placed as the head of the plant. He kept looking at the system for days and started to understand the 'strong' relationships between the different parts that caused the problems. He then systemically tackled the issue with lot of patience and right motivation. He started changing, modifying and replacing the parts of the system as needed with the eye to match them well. His focus was not on purchasing the best things or the best parts. He simply went on matching one part to the other so that they can 'dance in harmony'. So after a time, he transformed the 'strong' relationships into 'weak' relationships.

And the plant started performing extremely well. It started winning prizes for best productivity, least energy consumption, best quality, etc. etc. People were again proud and happy to work. The top corporate management was so pleased with the sudden change in performance that they decided to expand the capacity of the plant by putting up a new system along with a new limestone quarry.

From then onwards there was no looking back for this plant -- sorry the 'Elephant' ...

The Elephant danced after a long time and continues to waltz merrily.

 But is that so? For how long would that be?

Would the Elephant continue to waltz so gracefully even after say five years?

Lessons learnt:

a) It does not matter whether each part of the system is strong and reliable. What matters is how well they harmonize to produce the whole. The 'relationship' must 'dance in harmony'.

b) Strengthening parts individually does not help a system to perform at its best.

c) Strong relationships between parts cause strange emergence, while 'weak' relationships between parts provide stability and reliability. 

d) When people work too hard or fight or blame each other or pray too often it simply shows that the system is broken and needs attention. One of the indicators is ‘economic hardship’.

e) Lever points can be used to effectively to change system behavior. Leverage lies in the relationships and the thinking that goes into creating those relationships.

f) System behavior or emergence changes over time. It is difficult to predict but we can certainly watch when the Elephant starts showing the first signs of strain.  

g) One can't create a splendid design for the future by analyzing past records and data. 

h) To make an Elephant waltz look at the big picture and the relationships between parts of the system and never at the parts. Then only a viable ‘eco-system’ can be created that is sustainable.

i) A system that operates smoothly & harmoniously with low failure rate and maintained well produces less entropy and uses less energy per unit good produced. That is what future sustainability is all about.

In all the three examples of a silk sari, rice and the industry, we have all the elements that define our new world order: Eco-non-violent, Reliable, Local needs and Economic sustainability. It is not energy intensive. It aims to preserve local talent, skills and the eco-system. It is geared towards ‘development’ and not ‘growth’. Entire eco-systems might be developed to support and sustain such ‘eco-villages’ – creating new hubs of economic activities, only if one has the ‘eyes’ to see and the patience to create ‘local innovations’ with ‘global resources’.  

Hundreds of such local applications can be easily found for any country. What suits one country need not suit the needs of another. For example, the silk sari that matches so perfectly in the Indian cultural tradition might not be suitable for countries like the UK or the USA. Similarly, what would suit the UK or the USA might not be suitable for a country like India. But the example of the ‘rice’ is suitable for any country with regard to the staple crop it produces. And so is the case of the cement plant – meeting local needs with lessons that are applicable globally. In some cases the design of present products that are universally used all over the world might also to be questioned to create more energy efficient, reliable and better products. For instance, shoes, especially running shoes, as presently designed, actually absorbs less impact than thin soled shoes or slippers, the manufacturing energy cost of which is much lesser than traditional shoes.

It now depends on whether we have spotted the growing economic ‘opportunity’ of the future for earning and living sustainably and whether we are creating the right system design and the eco-system to sustain such economic activities – ‘eco-villages’, which would be more local oriented rather than aiming at global standardization & distribution. It improves the economy of communities (more distributed), provides profits for the new entrepreneurs to sustain the ‘eco-villages’ and raises the standard of living of the collective.    

Afterthoughts

1.     As on 2009 the world’s population stands at 6.70 billion

2.     The combined global land and ocean surface temperature in May 2010 was the warmest on record, at 0.69 degrees Celsius (1.24 degrees Fahrenheit) above the twentieth century average, according to the U.S. National Oceanic and Atmospheric Administration. We are inching towards the 2 degree F limit that defines irreversible global warming. 

3.     As of June 2010, by a 9 to 1 ratio, Chinese respondents to a recent survey said they had better opportunities to start businesses in China than in the U.S. By a 2 to 1 margin, Indians said their home country provided better education for their children. People seem to be turning homewards from the land of unlimited opportunities and innovation. Global to local is the focus now. While this is true of India and China it might not be so for other countries. The stress would therefore be to develop the economies of the developing world possibly by the approach as outlined in this paper.

Fair and lower taxation based on system thinking rather than on ‘reductionist’ or partial thinking is also proposed. Generally speaking, as of now, higher taxation affects the poor and the underprivileged. Counter intuitively, it might just be possible that lower taxation would help boost local economy and involve the underprivileged or economically backward section of the society in the economic transformation process towards building sustainable economies.

copyright 2010 Dibyendu De (content) and the Journal of Sustainability (format)

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Example 1 on Social Sustainability: The Silk Sari

  Marco Polo and his team created the famous silk route that started from Europe and ran through India and then went right up to China. The famous Chinese silk was discovered and introduced to the world and trade flourished.

Soon silk cultivation also began in India and the Indians creatively used silk materials for designing their dresses. And one of the best examples of such Design Thinking is the creation of a woman's dress known as the sari. It is 5 meters long unstitched piece of cloth that a woman wraps around her body.  It might be wrapped around in slightly different ways. The dress is complete by itself. How does it qualify as a fine example of Design Thinking for Sustainable living? Here are some reasons:

1. One size fits all and is self containing (There is no such dress in the world that fits any woman).
2. Fits all types of body, sizes and ages and any woman looks elegant in that dress (a paradox & a great user experience).
3. Any woman who care to dress up in a silk sari looks beautiful (fulfills aesthetic requirement and user experience).
4. Infinite variation of designs and motifs can be made on this material -- colors, weaving, painting, jewels, gold, silver etc (great scope for endless improvisation and design innovation).
5. A dress that has almost unlimited shelf life -- can last up to 40 to 50 years & still look good (sustainable and not oriented at consumerism).
6. Made from silk worms (material is a renewable resource).
7. Silk saris need very little washing and maintenance. And usually washed with the sap of a seed (no detergent used, eco-non-violent, little or no use of water).
8. Can be worn indoors or outdoors (multiple uses).

And it is also a good example of Social Sustainability. Why?

1.     Many workers need to work together to co-create this wealth. A vibrant and economically viable eco-system is also developed.

2.     It involves communities of silk growers, weavers, artists, designers, jewelers, stone polishers, and shop keepers -- all traditional trades

3.     Wealth sharing within the community and beyond

4.     Sustainable work for generations of workforce based on traditional and artistic skills

5.     No global warming -- no carbon footprints during manufacturing -- made in hand looms

6.     No ecological damage -- does not rely on non-renewable resources or damages forests, plants, water or animals

7.     Needs low capital to produce

8.     Can sell from around $ 4 to $ 100,000 (more than a Ferrari)

9.     Market sustainable and never vanishing

10.                        Catering from a basic need to vanity

11.                        The whole is more beautiful than any part of it. The whole (including the beautiful woman who drapes this silk) brings out the deeper meaning & beauty -- difficult to tell who is more beautiful -- the woman or the sari -- both would be my answer. 

Example 2 on Social Sustainability: Cyclone Eats Rice & Tiger for Breakfast

Two of the best quality saline tolerant rice varieties (Hamilton and Malta) of the Sunderbans (literal translation: beautiful forest -- the largest single block of tidal mangrove forest in the world: http://en.wikipedia.org/wiki/Sundarbans ) is now lost forever. Sunderbans is also the home of the Royal Bengal Tiger.

Introduction of high yield paddy (non-local varieties) gradually pushed a number of traditional saline tolerant varieties to extinction as delta dwellers preferred cultivating the big produce variety rather than the types that had endured ages of evolution and adapted to the local conditions.

However, when salinity rose alarmingly with the ingress of saline water after the cyclone Aila, the high yielding varieties just did not stand a chance. They failed to adapt to the changed conditions of the soil. As a result, the Sunderbans is now going through serious food scarcity and things will get much worse in the days to come.

As the population rose and the number of mouths in a family went up, people turned to high yielding paddy which doubled the crop quantity. Gradually, the cultivation of traditional paddy stopped and their seeds became rare and some of them became extinct in this highly sensitive ecosystem. All this happened in the last 25 to 30 years. The big and false assumption was that local varieties were low yield.

There are other losses too. The saline resistant varieties not only tasted better but also the straw provided better and stronger thatch roofs of the huts of the local inhabitants. Moreover, such varieties did not need fertilizers and pesticides to survive. Traditional organic variety has ingrained pest-repellent properties. The soil and the sub-soil water also gets better and better over the years with less and less use of fertilizers and protects other species in the environment that are dependent on the soil and water to survive.

It is not therefore surprising that the decisions that we take today to determine the way we live and earn affect others in our rather delicate uncertain relationships of our ecosystem.

What else was affecteThe Royal Bengal Tiger, an essential part of this eco-system is now close to extinction. There are now about 1400 of the majestic animals left. 50 years back there were more than 30,000 of these beautiful animals.

Lessons learnt:

a) Don’t play with a system unless we understand the relationships completely. Understand the context. Anything that affects the eco-system affects the economy and makes living difficult.
b) Assess the risks, uncertainties and the consequences before taking a decision on living and earning. Nature keeps score with consequences.
c) Focus on Development; Not Growth.
d) Critically examine and challenge assumptions before making changes in the system.
e) Adaptation is the rule of Nature; don't violate speed limits (the rate of adaptation). It only kills.
f) Think Big (systemically), Think Local, Act Local, Learn Global.

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copyright 2010 Dibyendu De (content) and the Journal of Sustainability (format)

Dibyendu De, Design Thinker, RMCPL, Kolkata, dde337@gmail.com

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Do we have a Common Understanding?

We have now examined the problem from four different viewpoints – economic, mathematics, thermodynamics and systems. In each case we found that we really have a real and irreversible problem. We also found the reasons for the problem to exist grow and develop. Most importantly we have now established that the present solutions by which we are trying hard to solve the problem of sustainable living are not only ineffective but also wrong. Are we trying hard to answer the wrong questions? Unfortunately, it is ‘YES’.

What might be the Possible Solutions?

What might be the possible solutions? The solutions have a cost, which would be more than a few trillion dollars that would affect billions of lives. What are some of the steps we have taken? Some of these are as follows:

a)     Asking people to mend their ways – to veer away from excessive consumption

b)    Use energy efficient lighting and electrical appliances

c)     Carbon trading – off sourcing manufacturing facilities to India, China and others

d)    Curb population explosion

e)     Conserve natural resources by using renewable energy sources.

f)      Recycle man-made resources

g)     Do not increase green house gases beyond those created by nature – use Bio-fuels

h)    Etc.

In the light of the discussions as above, the proposed solutions appear to be downright silly ideas. These simply don’t work. Let us take one example to understand this. An office tries to reduce its energy consumption by replacing fluorescent tubes by CFL (Compact Fluorescent Lamps). The savings is immediately offset if the office buys one additional SUV (Sport Utility Vehicle) that guzzles up the savings in form of the extra energy needed to run the car.

There must be a more efficient approach to the whole thing. We must find the answer within the system itself.

In order to do that, let us examine how the philosophy of economic growth came into existence and captured our imagination to spread like wild fire across the globe threatening our economies and the earth.

At the beginning of the previous century until around sixty years ago, fossil fuel was cheap and available in plenty. This allowed technology to grow in leaps and bounds. It allowed technology to become bigger and more complex. It used a lot of energy and churned out goods in millions and in no time. ‘Economics of scale’ was the secret mantra to make a lot of money in the shortest possible time. Soon industries became capital intensive and costly. That effectively kept out competition and industries were set up by people who had the money to invest. It also turned working people into robots who contributed to the economic growth through their disciplined highly skilled labour. Conformity and standardization were the key words to follow. As business houses became bigger and played a powerful role in the economy, nobody seemed to notice that the capital intensive industries were slowly becoming eco-violent.

In brief, technology that boosted economic growth in the developed nations had the following characteristics:

1)    big, 2) complex, 3) costly and 4) eco-violent.

This wonderful economic growth helped developed societies to march ahead relentlessly. Such societies improved their standard of living. All they needed was an ever increasing global market to sell the goods coming out non-stop from the assembly lines. They also needed highly developed infrastructure to move their goods around and make it available to the consumers. As a result of such rapid development, ‘megacities’ came up and people came to live and work in richer towns and cities. These megacities became so big and strong that such built environments were soon consuming 60% of the total energy of the nation. A better standard of living meant that people started consuming higher energy.

It did help to improve the lives of many but not for long. Within the next sixty years one particular element in the ‘Energy, Economics and Environment’ triad changed for good, which would now force us to have a relook at whatever we were doing. Old ways of doing would no longer serve us.  

As fossil fuel prices shot up, energy became costly. With the high cost of energy ‘economics of scale’ does not make much sense any longer. With high energy cost, technology obviously becomes costlier and more complex. Naturally, it follows, that the Return on Investment (ROI) on the costly capital investment does not work out favorably. This change in the economic environment is now forcing us to look at the obvious evolutionary route for both people and the earth, which would from now on be grossly determined by ‘technology’. Whether we like it or not technology would continue to stay and influence our lives. Industries and it eco-system would continue to be our main source of living and standard of living.

It is easy to envisage the natural evolutionary route that technology would be forced to tThe focus as I envisage would rest on the consumption of energy. The solutions might be as follows:

1)    Create industries and associated eco-systems that consume less energy and meets local needs. There would be many such industries based on local knowledge and know-how. Such industries might be small or big. Example – fashion industries, traditional medicines & health care, food and nutrition, education, housing etc

2)    Design products that are reliable and use less energy during manufacturing and usage.

3)    Existing industries would move towards becoming more and more reliable with low failure rates and wasting minimum possible energy. The focus would be on a) improving System Reliability and reducing the overall costs to operate and maintain such systems b) improving performance per unit of energy. Combining these two factors would help industries maintain profits and offer goods & services at affordable rates suited to local economies.  This would require a new way of designing, installing & running systems in cost effective ways.

4)    Design alternative materials for products that use energy intensive materials like aluminium and steel or design in such a way to minimize the use of such material. At the same time, the trends would be in using renewable materials, for example, in construction of houses and infrastructure.

5)    Use and apply more of innovative system thinking to create more sustainable and holistic economies (local as well as global) that would prevent energy wastages in work, infrastructure, housing and transportation. This type of system thinking based design would be needed for designing factories, schools, medical systems, local economies, housing, buildings, cities and villages. For example, create work and markets that would need less of transportation, infrastructure and energy without sacrificing salaries that would help people to maintain or improve their standard of living.

6)    Increased stress on maintenance and maintenance technologies to maintain the present assets and infrastructure at the least possible cost. This would be applicable to machines, factories, roads, buildings, bridges, airports, ports, etc.

Such innovative improvements can be applied ‘universally’. It would also mean that such technology based thinking, design and improvement must be made to suit local conditions, local needs and culture of local communities. It therefore implies that infrastructure and built environment must be such that it consumes minimum possible energy to build and sustain without sacrificing quality of living. This would then help us keep the entropy at a low level to match adaptation rates or maintain the rate of energy dissipation more or less constant at an acceptable level – the basic secret of social sustainability that would also improve the living standard of the people.

Therefore, new design skills, new type of thinking, education and its propagation would come into play. This would enable people to truly participate in the transformation of their economies by developing and selling their talents and not only their hands and/or time to create newer and better ways of sustainable living and improve their standard of living.

Such an evolution would therefore help us look at things differently and work differently. In a nutshell the suggested focus areas would help people and the earth by being ‘Eco non-violent’, ‘Reliable’ and ‘Development Oriented’. This would be the mantra of living for the future.

To live and support this mantra some fundamental social changes would be needed, which are the following:

1.     To stabilize population – women’s education and empowerment that allow them to make reproductive choices.

2.     Change in education system away from the rigid approaches that stultify innovation towards one that helps learners see systems as a whole rather than in parts of a growing and living system but simultaneously focusing on local problems and needs.

3.     More inter-reliant collaborative skills amongst communities to earn and live sustainability.

4.     If the previous century belonged to ‘scientists’ this century would belong to ‘engineers’,  ‘designers’ and ‘system thinkers’. We would definitely need more design and engineering skills backed up by system thinking to make the successful transition to the new world order that would focus on local needs and local development and sustainability. The focus would shift from ‘economic growth’ to that of ‘human development’.

I would like to end this paper with three simple examples of social sustainability that has the potential to improve the standard of living of the collective.

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copyright 2010 Dibyendu De (content) and the Journal of Sustainability (format)

Dibyendu De, Design Thinker, RMCPL, Kolkata, dde337@gmail.com

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The Root of the Problem

We would like to search for answers from different viewpoints than purely from an economic perspective.

Economic Viewpoint

It is clear that economic growth is directly related to energy consumption. The coming together of the three things – ‘Energy, Economics and built Environment’ defines modern civilization. In addition, this triad is what is affecting the people and the earth.

So far, we have assumed that economic growth is the key to prosperity and better standard of living. Governments all over the world are hell bent on pushing economic growth for their individual countries.

However, what might be the effect of such great effort?

We now see that boosting global economic growth is an extremely inefficient way achieving poverty reduction and sustainability and is becoming even less effective as years go by. For instance, between 1990 and 2001, for every $100 worth of growth in the world’s per person income, just $0.60 found its target and contributed to reducing poverty below the $1-a-day line.    As a result, to achieve a single dollar of poverty reduction, $166 of extra global production and consumption is needed, with consequent enormous environmental impacts which counter-productively hurt the poorest most.

Hence, we need to move decisively away from the inefficiency of relying on global growth for poverty reduction, towards a system in which policies are designed explicitly and directly to achieve our social and environmental objectives, that is ‘human development’ and whilst treating growth as a mere by-product.

But why would we prefer human ‘development’ over global ‘growth’?

The Mathematical Viewpoint:

Perhaps it might be better to see the difference through mathematical logic.

Let us consider the earth (E) as the universal system or set where all sub-systems do exist.

The property of this set E is such that it does not grow but constantly changes to produce new relationships.

Now the economic system (say set A) is naturally a sub-system of the set E.

The property of this set A is such that it always grows.

But we know that A is a sub-set of E.

Logically if E does not grow at all but A keeps growing then a point comes when A outgrows E and the therefore A ceases to become a subset of E and balance between A and E is lost. Chaos follows.

That is exactly that has happened now. It is now estimated that we are trying to live on 40% more resources than what the Earth can produce or sustain at this point of time -- hence the problem. Moreover, the US alone consumes around 60% of the earth’s resources. Would it then be possible for others to live to the same standard of living as that of the US? Certainly this is impossible.

The Thermodynamic Viewpoint

The first law of Thermodynamics tells us that we can’t create or destroy energy; only convert it from one form to another. This is fairly straightforward to understand. None doubt this at all. In simple words it would mean that the energy and the resources available to us for exploitation are fairly constant. We can’t do much about this. Hence this can’t grow any further.

That is fine. But the ugly problem rears its head as soon as we examine the situation in light of the second law.

The second law deals with ‘entropy’. Entropy is an elusive term. We can say that all matter around us has a certain amount of maximum energy which we call the ‘free energy’. This energy is being constantly dissipated into the environment and matter transforms increasing the entropy in the process. The rate of such dissipation determines the transformation or the degree of chaos. The bad thing about it is that it is an irreversible process.  

However, from the second law of thermodynamics one thing is clear. Entropy can’t decrease. It can either go up or remain constant. In other words it would mean that the rate of dissipation can’t decrease. It can either go up or remain constant. If it goes up, chaos increases and our present problem is accelerated. We can contain the problem in a sustainable way if it remains constant.  

Unfortunately, at present it is going up. The rate of utilization of resources (energy) is much faster. With the entropy going up an equilibrium point is reached when all the free energy of a matter possessed is given up. Naturally what happens next is death.

To illustrate this concept we might consider two examples. A fire burning coal is an example of an irreversible process (since we can’t get back the coal) where the entropy would increase. Whereas if we just warm a pail of water by sunlight but do not allow it to boil into steam the entropy remains constant since this is a reversible process (we haven’t changed the state of the water from liquid to gaseous form).

There is another thing that happens with the rate of dissipation changing. Let us consider the world as a thermodynamic system with the outline of the earth along with its atmosphere as a natural boundary of the system. Energy enters the system (from the Sun) but finds it increasing difficult to get out of the system boundary, owing to ‘greenhouse effects’. When this happens we are allowing heat in the system to gradually increase (reinforcing cycle) and with such an increase the water in the ocean and matter like ice of say icebergs start to change form (water to steam and ice to water). The same would happen to the air and it starts changing its density at different layers and starts changing its state from that of say a ‘non-chaotic state’ to chaotic state (turbulent flows). If that be so, entropy starts increasing in the system. As entropy starts increasing, the wind and the water of the oceans start changing their directions of flow patterns, seeking new paths of least resistances.  The velocity of the flow also increases to keep up with the increase in the entropy within the system (they just try harder enough to dissipate the energy through increased friction of ferocious storms – the only way available to Nature so as to maintain a constant rate of change of entropy). Slowly it loses the battle. What happens next is easy to understand from the viewpoint of nature. Climate changes, vegetation changes, species start their desperate attempt to adapt for survival. When the ‘adaptation rate’ is slower than the change itself, species (both plant and animal) die. This is exactly what is happening.

Today, the emperor penguins living off the coast of Latin America swim 900 kms into the ocean to gather food whereas even 50 years back then were only going 40 kms into the sea for food. They are adapting to the changes. As soon as their adaption rate becomes slower than the rate of change, they will become extinct.

This had happened to the ‘blind dolphins’ that lived in the Yangtze River in China. With the unprecedented economic growth taking place in China, the river is used for transportation. Hence a large number of steamers now ply on this river. These steamers make a lot of noise in the water. The poor blind dolphins that rely on their sense of hearing for food were confused by this strange loud noise. Their hearing was impaired and they could no longer hunt for food. They failed to adapt to this change and today not one of these dolphins is alive.

Clearly, from the thermodynamic viewpoint, it is not possible for us to live in a sustainable manner.

System Point of View

From a System point of View, we have three types of rates to deal with, which are as follows:

a)     Rate of economic growth

b)    Rate of change of entropy

c)     Rate of adaptation

How does ‘adaptation rate’, ‘rate of change of entropy’ and ‘rate of economic growth’ relate to each other? These are related in at least two ways.

Firstly, rate of economic growth influences the rate of change of entropy and the rate of change of entropy influences the rate of adaptation. One sequentially follows the other.

Secondly, since these are all ‘rates’ the term ‘time’ could be common to all. This is a fallacy. Nature’s time scale does not match our invented time scale. Our time scale (by which we try to measure everything) has two main characteristics – a) time interval is constant (linear) and b) continuous (analog). Would Nature obey such a time scale for its own function? No. It appears that Nature has it own time scale that is different to ours. This is evident because most changes are exponential in nature (non-linear). The phenomenon that happens in nature is neither linear nor continuous. Why is it so?

Transformation in Nature happens in discrete jumps. Things do appear to remain constant for some time and then suddenly a transformation occurs. Next, matter undergoes several transformations. The time, rate of change and energy taken for each transformation is not equal to the time, rate of change and energy taken for other transformations. Hence for Nature, time is neither linear nor continuous. It is rather non-linear and discrete.

This is where the problem is -- a total mismatch of Time scales -- Linear vs. Non-linear; Analog vs. Discrete. That is why most of what we observe in nature appears to have non-linear character. Therefore, the linear and continuous time scale of our economic growth does not match the non linear time scale of change of entropy and when a species cannot keep up or adapt to the time scale of entropy (non linear adaptation rate) it dies. This I presume is Nature’s way to balance the entropy and keep the rate constant as possible. Does this have any relationship with infant mortality rate of poor and developing countries? It may!

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copyright 2010 Dibyendu De (content) and the Journal of Sustainability (format)

Dibyendu De, Design Thinker, RMCPL, Kolkata, dde337@gmail.com

Abstract

The world for the last 200 years has developed on the fundamental principles of industrial economy. At this point in history, we realize that it does not work for us anymore. Europe struggles economically, Asia struggles militarily, US Gulf struggles environmentally, and middle class just struggles and keeps struggling and sinking.

Adam Smith was true. Karl Marx was true. However, we wanted to take sides with one or the other and live in separate worlds – a world defined as capitalist and the other defined as socialist. However, there is no country today that totally follows Smith or Marx. We have both.

It is dangerous to believe that future of the common people and that of the earth should be based on unmitigated economic growth, open markets, globalization etc.

We are slowly realizing the wisdom that we must leave the same resources as we enjoy today for the 7^th generation that would follow us.

Hence, social sustainability is the answer. It has two parts to it. First, how do we make a living? Second, how do we continue to live comfortably for generations without depleting the resources of the earth too fast? Both issues are interrelated.

The paper tries to address these vital issues on social sustainability from different perspectives. We would therefore be forced to Design Think a new way of earning and living.

Introduction:

The writing is clear on the wall.

Major Global Issues Synopsis
as reported by the UN Environmental Program (UNEP)

Population
World population passed 6 billion in 2000, up from 2.5 billion in 1950. Almost all growth will occur in the developing world.

Poverty & Inequality
The degree of inequality between rich and poor is not getting smaller, and this is a deterrent to reduction of poverty. There are still 1.2 billion people who subsist on less than $1 per day.

Food & Agriculture
Food consumption per capita is increasing substantially around the world (both developed and developing countries), measured in calories. Food production is increasing, but continued increase is limited by available land and water, especially in Asia.
Water
Water use is growing over twice the rate that population is growing. 70% of water is used for agriculture. Worldwide, half of all wetlands have been lost, and more than 20% of the 10,000 known freshwater species are extinct or threatened.

Forests
 The world's forests continue to shrink. The highest rate of decline is in Africa, followed by Latin America. The loss of forests is lowering water quality and causing floods. About 10% of tree species are at risk of extinction.

Energy
Consumption of all types of energy is growing, the largest increase being fossil fuels. Renewable energy sources (mostly hydroelectric) account for 4-5% of the world's energy, and potentially much more. Solar and wind power currently account for only 0.04% of the total.

Climate Change
Fossil fuel consumption and carbon dioxide emissions continue to grow, especially in Asia and the US. The level of said consumption and emissions per capita is 10 times higher in the US than in the developing countries, and twice as high as in Europe. There are many signs of climate change, such as rising temperature (2 degrees F.), rising ocean levels, 40% melting of Arctic ice, and changing weather patterns including more intense droughts and more intense storms. .

Health
Most deaths in the least developed countries are readily preventable. These deaths-often in childhood-are primarily due to communicable, environment-related diseases. Most common of these are due to lack of clean water and sanitation. Over one billion people still lack access to safe water, and 2.5 billion lack adequate sanitation facilities. 96% of all deaths owing to natural disasters happen in the developing world. This translates roughly into death of 50 million people per year.

What does all this mean?

In brief, it means that though we are all trying our best to feed people and eliminate poverty - exactly the opposite is happening. People are becoming poorer and the resources are vanishing much more quickly, climate is changing fast and people are dying from otherwise preventable causes. In addition, it appears that much of the problem appears to be happening in the developing world rather than in the developed world.

If that is so then the answer appears to be rather easy. Let us all start living the way people in developed countries live. Most of us do think so and it is not a surprise to see that many from the developing world live their lives in the developed part of the world.

But is this possible? The answer is NO.  

For example, it is estimated that if all of us want to live the way people live in the UK then we would at least need two Earths to live. In addition, if we do want to live the way people live in the US then we would need at least five Earths. Now that is quite a problem. We have not yet found another Earth anywhere else. Obviously, this is impossible. So are we only destined to die a slow death much before the sun actually disappears? Or can we do something about it now?

[Continued]

copyright 2010 Dibyendu De (content) and the Journal of Sustainability (format)

[continued]

Glossary

COC         Codes of Conduct

CP           Cleaner Production

CPI          Cleaner Production Institute

CSD         Compliance and Systems Department

EMS         Environmental Management System

ENERCON National Energy Conservation Center

EPAs        Environmental Protection Agencies

HRD         Human Resources Department

ISO          International Organization for Standardization

LCD          Liquid Crystal Display

NCS         National Conservation Strategy

NECP       National Energy Conservation Policy

NEQS       National Environmental Quality Standards

NSDS       National Sustainable Development Strategy

PEPA        Pakistan Environmental Protection Act

REEE        Renewable Energy and Energy Efficiency Program

SCI-Pak    Sustainable and Cleaner Production in the Manufacturing Industries of Pakistan

SMART     Self-Monitoring and Reporting Tool

SMEs       Small and Medium Enterprises

SP           Sustainable Production

TOE         Targets of Evaluation

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By Ahmad ur Rehman Hafiz, ahmaderfurt@googlemail.com

[continued]

Comparison of findings

The following table draws a comparative analysis of the survey results at both companies.

The comparison shows that the two manufacturing companies in Pakistan have no common level of sensitivity and attitude towards ISO 14001. The majority of companies want to improve their export performance through ISO 14001. Since the adoption of an EMS requires commitment from the management, allocation of financial resources, creation of organizational structure, the companies calculate cost and benefits of this investment.

Over and above due to the absence of any significant financial assistance from the government, the incentive to acquire ISO 14001 certification is further reduced.  However, the companies which adopted EMS realize the improvements in their environmental performance with better management of solid waste, effluent reduction, improved energy efficiency, reduced emissions and better monitoring of environmental aspects of production processes. Hence it is clear that the implementation of ISO 14001 at Pakistani manufacturing industries provides a good solution to environmental management, enhanced environmental awareness and a good tool for marketing, provided conditions required for the certification are set by the government adequately. That means low-cost certification-trainings and subsidized certification programs should be available for small and medium sized enterprises. Policy recommendations are included at the end of the paper.

Indicator 7 of table no 1 shows that, in both of the companies surveyed, ISO 14001 EMS has contributed towards the cleaner/sustainable production as well. Azgard9 has set up an effluent treatment plant and conducted a number of energy conservation initiatives. The interview finds that the company has installed steam traps on all steam lines, and improved boilers productivity with the installation of economizer.  A waste heat recovery boiler has also been installed on power generators.

Analysis of the company’s responses reveals that the company has achieved significant benefits from the EMS and has strong operational controls over all critical energy and resource intensive processes. The company is effectively conserving the resources and controlling its energy consumption. The implementation of an EMS based on ISO 14001 led to the implementation of CP technologies in Sapphire textile mills, where 50 percent of LCD lighting systems have been installed at production floors and boundary walls.

Regarding indicator 10 of table 1, the responses of the survey reveal that through the EMS, the awareness of employees to environment has also improved. As in Azgard9, regular refresher courses are conducted regarding environmental management system where all its employees receive training. Similarly in Sapphire textile mills, the Compliance and Systems Department conducts awareness training on a monthly basis for all new employees.

Regarding the question, to what extent does an EMS facilitate compliance with applicable environmental regulations (indicator 8), there are mixed responses. In this case Azgard9 has responded that since the company complies with environmental laws it avoids legal liabilities like fines/charges, whereas the Sapphire textile mills responded that the EMS does not reduce the regulatory liabilities for the company.

The outcomes of the survey thus make it clear that there is a significant potential of improvement in environmental performance in manufacturing companies in Pakistan through ISO 14001. Public policy should enable and facilitate the companies in acquiring ISO 14001. There is a need to establish conditions which encourage the implementation of the certification within manufacturing companies.

This includes raising awareness of industries to certification, making low-cost training programs accessible to companies and also providing financial incentives to adopt certification. NGOs, media and civil society can be brought in to start dialogue with the polluting companies and sensitize them about the environmental concerns of their production processes and demonstrate benefits of environmentally responsible production practices in marketing practices and thus gaining competitive advantage over their competitors.

There are good lessons to be learned from past successful experiences of trade liberalization policies in Pakistan that in addition to bringing significant boost in country's exports also generated positive impacts regarding environmentally friendly manufacturing. This is evident in the case of export-oriented textile firms in Pakistan which are mostly ISO 9000 certified now and use relatively more environmentally friendly production techniques compared to the firms which focus only on domestic market (Luken & Hesp, 2004, p. 127). 

There is a need to strengthen the capacity of the companies serving the domestic market but that lack the resources to qualify environmental standards like ISO 14001. As discussed earlier these companies need capable and trained staff to establish and operate environmental management system, and the certification-training is too costly for these companies. Furthermore given that there are very few auditing firms in the country, the companies had to turn to foreign auditors that in turn demand high consultancy fees and service charges, making it difficult for small and medium sized companies to invest in certification.

Policy Recommendations

The findings of the survey “Is there any potential of increased environmental performance through ISO 14001 in manufacturing companies in Pakistan?” reveal that small and medium sized companies lack finance, guidance and expert staff to establish an ISO-14001 EMS. The following recommendations are based on the findings of the survey:

• There is a need to make low-cost certification available in Pakistan in order to enable SMEs take advantages of ISO 14001. Government needs to make low-cost training programs accessible to SMEs and develop conditions for standard's implementation in SMEs.
• Experience in Pakistan show that the business associations have a strong interest to cooperate in matters pertinent to trade promotion. Interviews conducted for this study reveal that All Pakistan Textile Manufacturing Association (APTAPMA) in collaboration with the embassy of Netherlands has started providing free of cost services to organizations that want to implement an EMS but the scope of such services is limited. This initiative provides a good example and government can also contribute with a partial funding or giving tax exemptions to organizations willing to implement an EMS.
• Government should enhance awareness of companies with regard to ISO 14001 through information campaigns, organizing seminars, round tables, workshops, conferences and disseminating guidance material.
• Government should increase the number of registered ISO certification bodies in the country so that the organizations have more choices and price comparison. With increased number of government approved private certification bodies, monopoly of existing bodies will be challenged and there will be a tense competition among them to win more and more clients and thus offer comparative prices.
• As the companies cannot acquire ISO 14001-certification unless their effluents comply with the NEQS prescribed limits, government should improve the capacity of environmental agencies for enforcing NEQS. The companies which would already be complying with NEQS, would find it easy to get ISO 14001 certification.
• According to the survey findings, the cost of ISO 14001-certification depends on the size and nature of the entities. This cost can be divided into two types: 1) the cost incurred on the implementation of an environmental management system and it requires allocation of a permanent budget within company’s expenditure accounts; for example allocation of finances for the installation of waste water treatment plant; and 2) the cost of services paid to the certification body. The later cost stands between Rs. 200,000 to 300,000 (US $ 2,341.65 to 3,512.47). Medium and small sized companies find it difficult to bear former costs since they are recurring costs and there must be sufficient capital from which an appropriate amount can be specified for maintaining the system. In order to encourage these companies, government can announce a subsidy on waste water treatment plants and energy conservation technologies etc.
• The evidence suggests that majority of companies adopt ISO 14001 due to its perceived advantages in marketability of company’s products and services. In order to improve the incentive for ISO 14001 certified companies, in public procurement, they can be preferred in awarding tenders.
• As the survey findings reveal that international buyers increasingly prefer the ISO 14001 companies in business contracts, those companies which do not have the certification are losing trade. For the survival of these companies in international trade, government should set up both short-term and long-term targets. In short-term a target of “minimum” number of ISO 14001 certifications per year could be set. While in long-term, the vision should be that all companies having a “certain” annual turnover must be ISO 14001 certified within five years.

[continued]

copyright 2010  Ahmad ur Rehman Hafiz (content) and the Journal of Sustainability (format)

By Ahmad ur Rehman Hafiz, ahmaderfurt@googlemail.com

Sustainable production is a concept that means producing goods and services in way that is least harmful to the environment. The European Commission, under its Switch Asia Program, is funding a three year project namely: SCI-Pak, for the introduction of sustainable production in Pakistani manufacturing industries.

Pakistan's history has largely been dominated by political instability, poor economic growth and low improvement in social and environmental sectors.

Being a larger contributor in economy after agriculture, Pakistan’s manufacturing sector has considerable environmental impacts as well. Since the government’s development policies have not been giving considerable attention to environmental considerations of industrial growth, the outcome is that Pakistani industrial exports faced multiple of sanctions by the developed world and lost their competitiveness.

Industrial pollution is a major source of environmental degradation in Pakistan. Due to the lack of enforcement capacity on the part of environmental agencies, the majority of industries discharge their waste water into open streams which create a variety of diseases and threats to the health of the population living in surrounding localities. The textile and tannery industries - which can be seen as representative of other major manufacturing industries in the country - largely employ production process that cause huge amounts of energy losses and resource wastage.

In the textile processing phase, for example, the environmental aspects are identified as: the lack of insulation on hot bare pipelines and surfaces, wastage of hot water and steam condensate, malfunctioning steam traps, wastage of energy from hot waste-water and flue gases, steam compressed air leakage, use of low efficiency motors, inefficient compressed air system and low power factor.

In addition to environmental aspects, social aspects of manufacturing processes are evident from the increasing number of industrial accidents due to the hazardous working environment. In occupational sectors including textiles, tanning, chemicals, paper, sugar, electrical and electronics, the workers suffer mostly from diseases like lung cancer, skin and eye diseases, deafness and headaches etc.

The contributing factors to such a low degree of environmental performance and huge social aspects of production processes are the inadequate policy frameworks, regulations, economic incentives for sustainable production and the lack of know-how on the part of industrial equipment manufacturers on developing energy efficient technology. The legislators lack the capacity to enforce or adapt existing legislation for manufacturing industries.

The constraints to growth of the sector are enormous, particularly: the sector faces difficulties in access to credit, availability of reliable infrastructure, capable human resources, bureaucratic functions of government and contract repudiation.

Legislators lack the capacity to enforce or adapt existing policy frameworks for manufacturing sector to foster sustainable production. As a consequence of poor regulatory enforcement, the manufacturing sector of Pakistan is littered with plethora of environmental problems.

With regards to environmental legislations and institutions developed for resource conservation in the manufacturing sector, the government has adopted: Pakistan Environmental Protection Act, 1997, National Environmental Quality Standards, National Conservation Strategy, National Sustainable Development Strategy, National Energy Conservation Policy, National Energy Conservation Center and Renewable Energy and Energy Efficiency Program.

Among the legislation and policies adopted against industrial pollution, the most significant and scientific approach to monitor and control pollution are the National Environmental Quality Standards (NEQS). Despite their being helpful in the measurability of pollution and effluents and a convenient monitoring tool for the environmental protection agencies, the lack of sustainable environmental frameworks makes the standards less effective. In other words, NEQS just set emission limits. They do not devise standards of environmental quality which ensure the long term stability of ecosystem.  Thus a company's compliance with the NEQS does not mean that it would not impact the environment. Furthermore, the enforcement mechanism for NEQS is inadequate. According to Government of the Punjab less than one percent of the polluting industries are complying with the NEQS.

In addition the reporting tool designed to facilitate companies to process the data on effluents and report to environmental protection agencies is also not effective. To develop the capacity of companies on the use and application of SMART for gathering and compiling data on certain environmental variables to report to environmental agencies, Punjab EPA has organized an introductory training of the SMART program in various chambers of commerce and industries, but the training programs are not backed by  feedback and there is no adequate mechanism for environmental survey or surveillance. According to Government of the Punjab there are hardly any industries which use the SMART for complying with the NEQS. (Government of Punjab, 2008, p. 35) 

To deal with these critical areas, two types of policy instruments can be adopted namely: regulatory and voluntary policy instrument.

As described above in Pakistan environmental regulations are failing due to inadequate capacity of government environmental agencies in enforcement. In such circumstances, voluntary instruments can play their role in improving environmental performance of manufacturing companies. The ISO 14001 environmental management system is one such instrument. The standard is comprehensive solution to environmental management challenges in companies. The certification to the standards is conditioned to implementing a management system with clear organizational structure, job description and sufficient budget in order to pursue activities and functions aimed at improving environmental performance of the company.

The standard is not restricted to just meeting the regulations, it goes even beyond and allows firms to voluntarily adopt measures for continual environmental improvement. The companies which seek certification need to set up internal environmental management system and pass a third party audit which would confirm the conformance to the objectives of EMS established by the companies. In view of tailor-made approach of ISO 14001 for each company, it appeared to be a best alternative in circumstances where government regulatory institutions lack the capacity to enforce state environmental legislation.

In order to test the question “Is there any potential of increased environmental performance through ISO 14001 in manufacturing companies in Pakistan?” a survey in two Pakistani manufacturing companies was conducted.As in Pakistan the number of ISO 14001 certified companies is very selective (according to Malik 2006 estimates only 4% of all 3000 ISO certified companies are certified to ISO 14001), the sample of the survey is also very small and sampling technique which is employed is purposive sampling (Purposive sampling starts with a purpose in mind and thus sample consists of the people of interest and those who do not suit the purpose are excluded). Furthermore, the constraints in choosing a bigger sample were mainly the availability of limited possibilities of communication due to geographical distance, time zone difference and lack of cooperation from various companies. Therefore, the only choice, author ended up for the survey was two leading textile companies namely: Azgard9 Ltd and Sapphire textile mills 7 Ltd.

Findings of the survey about the implementation of ISO 14001 at Azgard9 Ltd and Sapphire textile mills - two leading Pakistani textile companies

This study was aimed at testing the research question: Is there any potential of increased environmental performance through ISO 14001 in manufacturing companies in Pakistan? Given the selected quantity of ISO 14001 certified companies in Pakistan and the cross continental coordination problems in identifying and interviewing relevant personnel at the industry, the sample of this survey is limited to only two leading textile manufacturing companies, both having production facilities in Lahore.

Though the sample may not be representative of the whole manufacturing industry, it may be possible to generalize the findings to other manufacturing industries adopting ISO 14001 EMS. The sampling method used for the survey was convenience sampling. The factors taken into consideration while choosing respondent companies were first the presence of a source person who can be easily accessed and provide required information within appropriate limit of time, and second whether the respondent company has an interest in sharing the information with the outside interviewer. Building on these factors the two companies finally selected were the Azgard Nine Ltd and Sapphire textile mills 7 Pakistan.

Both companies are large export based textile manufacturers and their shares are traded on Karachi stock market. Both companies are briefly introduced below.

Azgard9 Ltd

Azgard9 Ltd. is a vertically integrated textile manufacturing company in Pakistan. The product line of Azgard ranges from specialized yarn, denim fabric to denim garments. The products are marketed and sold through out the world with major export destinations being the USA, Canada and Europe. Its customers of denim garments include internationally renowned retailers such as H&M, Espirit, Zara and GAP. Integrated industries units consist of spinning, weaving, dyeing, finishing and computer aided design and manufacturing, stitching and laundry/washing facilities. Currently Azgard has three manufacturing facilities, all situated in Pakistan. Unit I produces open end yarn, denim fabric and garments and is located in Kasur District near Lahore, Unit II: a ring yarn production facility is situated in Muzaffargarh, near Multan and Unit III: a denim garment manufacturing facility is located in Ferozpur near Lahore (Azgard9 Ltd, 2010).  

Sapphire textile mills Ltd

Sapphire textile mills Limited is one of the largest textile companies in Pakistan. The company deals in manufacturing and sales of yarn, fabric, home textile products, and energy sales. Currently its manufacturing facilities are located in Kotri, Nooriabad, Chunian, Feroze Watwan, Bhai Pheru and Bhopattian Lahore. Company's subsidiary business includes wind energy projects including assembling, manufacturing, and sales of alternative energy and lighting products. Its markets base is in the regions of Asia, Europe, Australia and North America (Sapphire textile mills Ltd, 2010). 

The aim and methodology of the survey

This survey mainly tries to evaluate the question “Is there any potential of increased environmental performance through ISO 14001 in manufacturing companies in Pakistan?” The secondary questions to get to this primary question included: Did the companies interviewed have any environmental policy in place? Why were the companies interested in the certification? Did the management of these companies provide full support for implementing ISO 14001 in terms of hiring auditors, setting up compliance department and allocating finances? Did ISO 14001 certification bring any financial benefits in terms of increase in their share-value or in other financial terms? What environmental, health and safety improvements did the companies achieve through ISO 14001- compliance? Did ISO 14001- acquisition exempt the companies from regulatory or tax liabilities by the government environmental agencies? Did ISO 14001 certification by the companies give them any advantage over their competitors? And was there internal training department existing in the interviewed companies for raising environmental awareness in employees and the role of such department?

The entire survey comprised of open-ended questions with the aim of receiving varying degrees of response in content and detail. To avoid possibilities of a communication gap some questions were repeated with variation in the language.

In approaching to right person who had access and knowledge of EMS related information, personal contacts have been used by the author. After identifying the concerned officials in both companies, a telephonic appointment was set up with them. In this conversation the respondents were briefed about the aim and the objectives of the survey. This step was followed by sending emails with the questionnaire attached for receiving companies’ responses..

Findings of the survey at Azgard9 Ltd

Azgard9 acquired ISO 14001 certification in 2005 within a period of six months. The adoption of ISO 14001 EMS was a part of corporate strategy of Azgard9 Ltd about Health, Safety and Environment which clearly states the goal of aligning the environmental performance to contemporary requirements (see image below).

The reasons to adopt ISO 14001 for Azgard9 were to comply with national and international applicable environmental laws; to operate in a responsible way; to fulfill the global customer requirements; to get a competitive edge by improving the environmental performance; and to conserve the energy, natural resources and minimize waste.

The management of the company gave its full support for implementing EMS by allocating finances, setting up a separate compliance department and hiring lead auditors.

In this regard, the company has established a water treatment plant with a running cost of US $ 8300 per year. Azgard9 has contracted with a private certification body namely SGS which performs one EMS audit annually and each audit costs Azgard9 an amount of US $ 3316. In addition to this, for environmental monitoring, the company has contracted an external party that conducts monitoring of gaseous emission, effluents, noise etc. and charges a fee of US $ 2380 per year. An additional amount of US $ 100 per year is incurred on the incineration of dispensary waste and electrical tube lights.

According to the survey response, the financial benefits of ISO 14001 EMS result in marketing benefits and demonstrating that the company is observing the global customers’ code of conduct. Though no comparison on how much sales increase the company has achieved due to EMS implementation is available, the company believes that EMS plays its role in its success of working with world renowned brands like H&M, diesel, NEXT etc.

As a part of its EMS, the company has analyzed environmental aspects and impacts, has set objectives and worked towards closing the gaps. In this connection, it has completed many energy conservation programs successfully, established operational control to all critical processes and in return enjoyed more customer satisfaction and confidence of legal agencies.

Towards implementing its EMS, Azgard9 has set up a husk boiler to replace the use of fossil fuels. The company has gained the advantages of setting up its EMS on cleaner production principles. In line with the CP steam traps are installed on all steam lines, economizer has been installed on boilers, waste heat recovery boilers have been installed on the power generations and an effluent treatment plant is installed.

By being proactive in environmental management, Azgard9 has been avoiding any legal charges or fee due to its activities. Furthermore, the improvements in processes and technology have brought benefits to Azgard9 in terms of competitive advantage over its competitors in the market of cotton yarn, denim fabric, and woven denim garments. To maintain the stability and the progress of its EMS, the company has an actively functioning internal training department that provides awareness training to all its employees.  It also conducts regular courses regarding environmental management systems under the umbrella of the human resources department which plans, executes and evaluates the effectiveness of trainings.

Findings of the survey at Sapphire textile mills Ltd

In the case of Sapphire textile mills the survey results reveal that the company obtained ISO 14001 certification in 2001 from UKAS & ANAB (a private certification and auditing firm) within three months. The adoption of ISO 14001 was an individual management decision rather than a part of corporate environmental strategy.

Sapphire textile mills argues that there is no economic value of adopting ISO 14001 EMS since none of its customers in the world are requiring ISO 14001 certification. Its drive for ISO 14001- implementation came from perceived export benefits but the company was disappointed when its global customers demanded to have audits according to their specific codes of conduct (COC) and targets of evaluation (TOE) instead of being satisfied with the company’s certification to ISO 14001.

There is insufficient support from the management of the company to maintain the stability and progress of the EMS. Since the company's customers have came up with new demands of advanced standards of product and environmental performance, the company feels that the implementation of ISO 14001 delivered no financial benefits in terms of increased sales and therefore qualifies the investment it made in the establishment of an EMS as unjustified. However, it still recognizes that it has achieved a lot of improvements due to  ISO 14001 certification in areas such as solid waste management including its disposal, monitoring of air emissions and prevention of ground contamination due to spill over.

Considering the steps it has taken in energy efficiency improvement, the company has installed 50% of liquid crystal display (LCD) lighting systems at the production floors and boundary walls and replaced the monitors with LCD.

Regarding the benefits accruing from the ISO 14001 certification in the aspects of reduced regulatory burdens on the company, Sapphire textile mills Ltd maintains that there were no realizable benefits in this regard for the company. Taking into account its customer demands, it had not gained any competitive advantage over its competitors by adopting ISO 14001 EMS.

In order to raise the environmental awareness of its employees, the company has set up an internal training department. The Compliance and Systems Department (CSD) in collaboration with the Human Resources Department (HRD) conducts awareness programs. HRD is responsible for the selection, recruitment and training needs assessment of employees while CSD is responsible for the implementation of standards, laws, regulations and COCs and TOEs of company's customers.

[continued]

copyright 2010 Ahmad ur Rehman Hafiz (content) and Journal of Sustainability (format)

* Independent Qualitative Comparative Researcher / Consultant, Vancouver, BC, Canada   Email:   munoz@interchange.ubc.ca

[continued]

Determining the optimal level of nationalization

            While we can nationalize it all, as some communist/socialist countries have done or did, this may not be an efficient move today as empirically it has been shown that some levels of privatization are needed to keep the overall system sustainable. 

Persistent full nationalization and total privatization deficits appears to be the empirical reason why the Soviet Block fell or so called Soviet Union effect, which may explain why China became more eager to move towards capitalism allowing slowly more controlled levels of privatization and moving away from full nationalization.

            This raises the possibility of the existence of an optimal level of nationalization, a situation where the level of the commons under public use meets social/public goals while allowing for some efficient private use. This situation can be appreciated both through a general asset inversegram and through a specific asset inversegram.

a) Optimal nationalization under the general asset inversegram

            Figure 8 below captures the dynamics leading towards this possible point of optimal nationalization using a general asset inversegram.

            Figure 8 above indicates that we can nationalize up to point (f), which covers the section of the commons that is not yet under private use, section between point (c) and point (d), but this does not meet social/public goals so it is not optimal.  Figure 8 above also shows that we can nationalize all the way to point (h) and allow no private use at point (a), but this would be unsustainable in the long term as it would be subjected to the general asset Soviet Union effect as it would be operating at a total social welfare waste and total privatization deficit level the distance from point (g) to point (h) and from point (a) to point (b) respectively. 

            Finally, Figure 8 above can be used to express the view that if we nationalize the commons to a point of nationalization such as point (g) and allow some privatization to point (b), then this would be an optimal nationalization point M* as at point (g) social/public goals are met while some efficient private activity can take place. In other words, a point of optimal nationalization M* is a point where the commons is in an optimally compromised state.       

            In summary, Figure 8 above can be used to say the following: 1) That an optimal nationalization point M* is possible at point (g); 2) That nationalizing beyond that point (g) = M* or to the right of it is not a good choice as doing this may make the overall system unsustainable as we would be operating under social welfare waste and privatization deficit; and 3) That allowing privatization beyond point (g) = M* or to the left of it, would lead to excess capitalism and to a social welfare deficits rendering those governments unable to meet their social goals. Hence, the optimal nationalization point M* in Figure 8 above is more than just social protection, it is the point of effective social protection.

b) Optimal nationalization under the specific asset inversegram

            Figure 9 below shows the nature of the optimal point of nationalization(M*) of national(N) and local(L) assets and its characteristics.

            Line M* in Figure 9 above indicates the following: 1) That optimal nationalization requires the nationalization of assets of national interest(N) and of assets of local interest(L) up to line M* and the introduction of privatization of national assets(N) and of local assets(L) as indicated by section “a” and section “b” respectively; 2) That if we nationalize to the left of line M*, there will be nationalization or social welfare deficits and excess capitalism of national and/or local assets, a non-optimal situation; 3) That if nationalize to the right of line M*, there will be excess nationalization or social welfare waste and privatization deficits of national and local assets, another non-optimal situation; and 4) That at line M*, there is no social welfare waste, no excess nationalization, no privatization deficits, no excess capitalism, and no social welfare deficits of any kind as it is the optimal point of nationalization.

            In summary, Figure 9 above can be used to say the following: 1) That an optimal nationalization point is possible at point M*; 2) That nationalizing to the right of that point M* is not a good choice as doing this may make the overall system unsustainable as we would be operating under social welfare waste and privatization deficit; and 3) That allowing privatization to the left of point M* would lead to excess capitalism and to a social welfare deficits rendering those governments unable to meet their social goals.  Hence, the optimal nationalization point M* in Figure 9 above again is more than just social protection, it is the point of effective social protection.

The search for the optimal level of nationalization in China

            As mentioned in the introduction above, China appears to be allowing currently some levels of  private activity involving assets of local relevance to little by little move towards a level of optimal nationalization while protecting assets of national relevance and keep political stability as its overall goal is still to meet its social/public goals, and the process of how China is doing that can be appreciated both ways, through a general asset inversegram and through a specific assets inversegram.

a) The optimal level of nationalization in China using a general assets inversegram

            The general asset inversegram for China is shown in Figure 10 below:

            Figure 10 above shows the following: 1) That China before opening its commons to private activity in assets of local relevance was operating at full level of nationalization at point (h) just as the Soviet Union did; and therefore China was operating at the point of full social welfare waste and total privatization deficits; 2) That since China now has started to allow some private use of assets of local relevance, it is operating at point (i) in terms of levels of privatization and between point (g) and point (h) in terms of levels of nationalization reducing the level of social welfare waste, but still at a private sector or privatization deficit at the space between (i) to (b) as China is still operating beyond the point of optimal nationalization at point (g) = M*, which is not efficient; and 3) That China in the future will allow privatization slowly to move from point (i) to point (b) to eliminate that social welfare waste and that privatization deficit associated with it, an efficient move as it coincides with the level of nationalization at point (g), which is the optimal level of nationalization(M*) as it meets its social/public goals. 

            See that at point (g) or optimal nationalization point(M*) in Figure 10 above, 1) There is not social welfare waste and there is no excess capitalism; 2) To the right of point (g) there is social welfare waste and privatization deficits; and 3) To the left of point (g) there is social welfare deficit and excess capitalism.  In other words, as long as China can meet its social/public goals by operating at point (g) = M*, it will be able to efficiently allow private activity at point (b), which will help to keep the system as a whole stable. 

            However, Figure 10 above also permits us to see by the broken line from point (b) to point (d) that 1) If private activity in China is allowed to go beyond point (g) or to the left of point M*, slowly or quickly, it will be a  point of excess capitalism, then China would not be able to meet its social/public goals as it would be operating at a social welfare deficit point; and 2) The bigger the social welfare deficit, the more unstable the China system would become.  Therefore, China has a strong incentive to keep for sure private activity up to the optimal nationalization at point M* and avoid privatization beyond this optimal nationalization point M*.

b) The optimal level of nationalization in China using a specific assets inversegram

            The specific asset inversegram for China is shown in Figure 11 below:

            Figure 11 above allows us to point out in detail step by step how China is moving from full nationalization(line T) to optimal nationalization(line M*) to remain politically stable during the transition: i) Section “1” and section “2” show that China has decided to allow slowly the privatization of local assets(L) and it will continue to allow it until it reaches the point of optimal nationalization M* and avoid that social welfare waste and privatization deficit;  and ii) Section “3” and section “4” indicate that after reaching optimality in the local assets privatization arena, China will have an incentive to privatize some national assets(N) up to the optimal point M* to avoid that social welfare waste and privatization deficit associate with national assets. 

            Notice that China is following the principle of inverse action, it quickly nationalized everything after the revolution starting from national assets to ensure system stability; and right now it is slowly allowing privatization starting from local assets to remain stable with the goal in mind of later privatizing some state assets.  And also notice that when China started to allow privatization in 1978, then the following happened: i) China went from a communist country to a dwarf country(Socio-capitalist) and from a communist development system to a dwarf development system(Socio-economic) as now it has a compromised use model; and ii) China created a dwarf market(State controlled invisible hand).

General Implications of the discussion above

Nationalization policy should be used as a proactive optimal policy to ensure effective social protection while encouraging controlled capitalism, not as a reactive anti-privatization non-optimal policy as it has been used so far.  This requires the nationalization of assets still in public use to place them outside the pulling forces of the private market; and the nationalization of private assets of national and local relevance.

Full nationalization is not an optimal point as it is affected by excess state/bureaucratic self-interest, leading to total social welfare waste and privatization deficits; and therefore, it is not an efficient social protection mechanism.  Full nationalization should be avoided. as it is not sustainable in the long-run as shown by the fall of the Soviet Union.

Full privatization is not an optimal point too as it is affected by excess individual/corporate self-interest, leading to total excess capitalism and social welfare deficits; and therefore, it is not an efficient social protection mechanism too.  Full privatization should be avoided. as it is not sustainable in the long-run as demonstrated by the recent excesses and crash of the financial system.

The optimal level of nationalization is an optimal compromised state and its goal is to ensure effective social protection, not just social protection.

The China experience shows that when moving from full nationalization to an optimal nationalization point, to remain politically stable, it should be done slowly beginning with the privatization of nationalized assets of local relevance first.

The principle of inverse action suggests that when moving from full capitalism to an optimal nationalization point, it should be done fast, beginning with the nationalization of assets of national relevance first.

The long-term viability of implementing optimal nationalization programs needs the creation of a world bank for optimal nationalization to assist countries with the financial support and expertise they may need to implement and ensure the success of such programs in the long-term.

Optimal nationalization theory is consistent with sustainability requirements.

Specific conclusions

            First, it was indicated that the commons can be thought as existing in three different scenarios: fully in public use, fully in private use, and as a compromised commons.  Second it was shown that the process of privatization and nationalization can be viewed as having different stages; that the nationalization process can be seen as the opposite of the privatization process or as privatization in reverse; that a level of optimal nationalization may exist at a point where nationalization meets social/public goals while allowing some levels of privatization; and that this is an optimal compromise state where social goals are met and controlled capitalism can take place.

            Third, it was pointed out also that current empirical development experience of China appears to be consistent with the theoretical possibility mentioned above as by allowing little by little some levels of privatization in assets of local relevance, China is now moving towards a level of nationalization that will still allow it to meet its social/public goals while eliminating social welfare waste, and therefore China is moving slowly towards an optimal nationalization point or a point of optimally compromised commons right now.  And finally, the general implications to other countries that are now moving towards or who will need to move away from the point of full nationalization or of full privatization were pointed out.

General conclusions

            First, it was shown that nationalization can be expressed as privatization in reverse.  Second, it was stressed that a possible optimal rate of nationalization exist; Third, it was shown that China is following the principle of inverse action when moving from full nationalization state towards the optimal nationalization point by slowly allowing privatization of assets of local relevance first; and finally, it was pointed out that nationalization policy should be used as a proactive optimal policy to ensure effective social protection while encouraging controlled capitalism, not as a reactive non-optimal policy as it has been the case so far.

References

Adams, Martin, 1995.  Land Reform: New Seeds on Old Ground?, Overseas Development Institute, Portland House, Stag Place, London, UK.

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González, María A. and Rigoberto A. Lopez, 2003.  Market Based Land Reform and Farm Efficiency in Columbia: A DEA Approach, Department of Agricultural and Resource Economics, University of Connecticut, Storrs, CT, USA.

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Muñoz,  Lucio, 2009, ¿Cómo son los Beneficios del Desarrollo Agrícola Actualmente Distribuidos: Es el Efecto Goteo o el Efecto Embudo?, En: Ambiente y Sociedad, Edicion Especial, No. 372, Enero 8, ECOPORTAL, Buenos Aires, Argentina.

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Stuckler , David, Lawrence King , and Martin McKee, 2009.   Mass privatisation and the post-communist mortality crisis: a cross-national analysis,  The Lancet, Vol. 373 No. 9671 pp 1247-1248 , London, UK.

Tamayo, Juan O., 1996.  Cuba selling off firms, but `privatization' still a dirty word, The Miami Herald, October 10, Miami, Florida, USA.

The Brookings Institution(TBI), 2008.  Can Raúl Castro Revive Cuba's Private Sector?, March, Washington, DC, USA.

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The Havana Journal(THJ), 2007.  Panel Discussion on Cuba From Caribbean Central American Action Conference, December 10, South Dennis, MA, USA.

The Wall Street Journal(TWSJ), 2010.  Obama v. Wall Street: The President Gets Serious About Moral Hazard, January 22, New York, NY, USA.

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copyright 2010 Lucio Munoz and the Journal of Sustainability

By Lucio Munoz*

* Independent Qualitative Comparative Researcher / Consultant, Vancouver, BC, Canada   Email:   munoz@interchange.ubc.ca

[continued]

            Notice that when there are no assets in public use(g) and in private use(p) at the same time, then there is no commons(c), which can be stated as follows:

c = gp

The nature and characteristics of the different types of commons

            From the model presented above( C = G + P ), it can be seen that there can be three different types of commons:

a) The commons under full public use(C1)

            One possibility is that the commons is under full public use(G), no private use exists(p), which can be represented as:

C1 = Gp

            This would be the case of a fully totalitarian state or full nationalization(FN) where no private uses exists(p).  As it can be seen in Figure 5 below, there is a point of full public use at point “a”.

b) The commons under full private use(C2)

            Another possibility is that the commons is under full private use(P), no public use exists(g), which can be presented as follows:

C2 = gP

            This would be the case of a fully capitalistic state or full privatization(FP) where no public uses exists(g).  As it can be seen in Figure 5 below, there is a point of full capitalistic use at point “b”.

c) The commons under compromised use(C3)

            The third possibility is that the commons is under compromised used(M), one where the commons is under both public(G) and private(P) use at the same time:

C3 = GP = M

            This would be the case of a mixed state, where both public(G) uses and private uses(P) coexist or exist at the same time.  As it can be seen in Figure 5 below, there is public use-dominated mixed state at point “c” and there is a public use-dominated mixed state at point “d”.

            Note that the arrow on the top of the inversegram indicates that levels of public use(G) of the commons move from left to the right; and that the arrow below the inversegram shows that levels of private use(P) of the commons move from the right to the left.

Possible levels of privatization

            To facilitate the presentation of ideas, it is assumed that there are four possible levels of privatization: zero privatization, weak privatization, strong privatization, and full privatization.  Figure 6 below captures these ideas in detail.

            Figure 6 above shows the different levels of privatization of the commons as we move from right to left at the base of the figure:  At point (a) we have zero privatization; at point (b) we have weak privatization; at point (c) there is strong privatization; and Full privatization is found at point (d).  Notice that as the level of privatization increases, the level of public use decreases, showing that nationalization is privatization in reverse.

            Also see that the move from point (a) to point (b) in Figure 6 above can be seen as the pre-globalization period when we moved from no privatization at all slowly to some privatization; and that the move from point (b) to point (c) can be taken as the globalization period, the move from weak quickly to strong privatization.

Possible levels of nationalization

            Since nationalization can be seen as the opposite of the privatization process or as privatization in reverse, then there can be also different levels of nationalization, which can be appreciated in Figure 7 below:

 

            Figure 7 above points out the different levels of nationalization possible as we move from left to right at the top of the figure:  at point (e) we have zero nationalization; at point (f) we have weak nationalization; at point (g) there is strong nationalization; and full nationalization is found at point (h).  Notice that as level of nationalization increases, the level of private use decreases.  Hence, privatization is nationalization in reverse, which is consistent with the principle of inverse action.

            Also see that the move from point (e) to point (f) in Figure 7 can be seen as the period of nationalizing all assets that are not yet in private hands and are still in public hands.  And the move from point (f) to point (g) can be taken as the period of strong nationalization of private assets.

[continued]

copyright 2010 Lucio Munoz and Journal of Sustainability

* Independent Qualitative Comparative Researcher / Consultant, Vancouver, BC, Canada   Email:   munoz@interchange.ubc.ca

Methodology

            First, the qualitative comparative terminology used in this paper is listed.  Second, some operational concepts relevant to the presentation of the ideas in this paper are introduced.  Third, a commons variability model is presented, which allows pointing out the nature and especial characteristics of the different types of commons consistent with it.  Fourth, the notion that there can be four different levels of privatization is pointed out.  Fifth, the inverse idea that there can be four different levels of nationalization is discussed.

            Sixth, a framework that allows us to visualize the nature of a possible optimal level of nationalization both using a general asset and a specific asset inversegram is shown.  Seventh, the optimal framework above is used to show how China, by slowly allowing some levels of privatization, is moving toward a point of optimal nationalization right now.  Eight, some general implications that can be extracted from the ideas discussed above are highlighted.  Finally, some relevant specific and general conclusions are provided.

Terminology

            The qualitative comparative terminology used to present the main ideas in this paper is listed in Table 1 below.    

Table 1

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C = The commons                                          c = There is no commons

G = Public use exist                                       g = no public use exist

P = Private use exist                                       p = no private use exist

M = Compromised use                                  M* = Optimal compromise use

FP = Full privatization                                   FN = Full nationalization

N = Assets of national relevance                    L = Assets of local relevance

----------------------------------------------------------------------------------------------------

Operational concepts

a) Inversegram: refers to a diagram used to present or represent opposite processes.

b) Representing the commons as a rectangular general asset inversegram

            The commons(C) can be represented by a rectangular object  or cake made up of assets under inverse uses, public use moves from left to the right; and private use moves from right to the left, as shown by the arrows in Figure 1 below.

            The inversegram in Figure 1 above allows us to see that the commons(C) can be envisioned as a rectangular figure or cake that can be divided among different uses such as public use(G) or private use(P) or compromised uses(M).

i) Public use(G): When the commons is being used to meet social goals it is said to be in public use.  Figure 1 above shows, as indicated by the arrow at the top moving left to right, that public use of the commons(C) can vary from zero to one or from nothing to 100%.  When public use is zero(G = 0), then the commons is totally privatized or there is full privatization(FP). 

            When the public use is one(G = 1), then all the commons is in a fully totalitarian state or there is full nationalization(FN).  When public use is between zero and one(0 ≤ G  ≤1), the commons is in a mixed use state. 

ii) Private use(P): When the commons is being used to meet private goals it is said to be in private use.  Figure 1 above also indicates as shown by the arrow at the bottom moving right to left, that private use can vary from zero to one or from nothing to 100% too.  When private use is zero(P = 0), then the commons is totally in public use or there is full nationalization(FN). 

            When the private use is one(P = 1), then all the commons is in a fully private state or there is full privatization(FP).  When private use is between zero and one(0 ≤ P  ≤1), the commons is in a mixed use state.

iii) Compromised use(M): When the commons is in a mixed used state, it is said to be in a compromised use(M).  When the portion of the commons in public use related to the portion in private use is bigger, we have a public use-dominated mixed use or public use-dominated compromised use.  When the portion of the commons in public use related to the portion in private use is smaller, we have a private use-dominated mixed use or private use-dominated compromised use. 

            For example, it can be seen in Figure 1 above that if the commons or cake is cut as indicated by the broken line in such a way that 0.6 of the commons is in public use and 0.4 of the commons is in private use, then we have a public use-dominated mixed or compromised state in this case.

c) Optimal nationalization point(M*): refers to the nationalization point where social/public goals can be met while allowing efficient levels of privatization at the same time.  It is an optimal point of compromised use.  Nationalizing after this optimal point leads to nationalization inefficiencies or waste; and nationalizing short of this point leads to nationalization deficits, both of which are sources of system unsustainability.  In the long-term, as they accumulate, they can even lead to system collapse.

d) Representing the optimal nationalization of the commons through the general asset inversegram

            If we assume that the optimal nationalization level is found at point M*, as shown in Figure 2 below, then we can use it to introduce the following concepts:

i) General asset optimal compromise use: is the level of public use and the level of private use that meet at the point of optimal nationalization(M*).  Operating to the right or left of M* is not optimal. The further away we operate from optimal M*, be it right or left, the more unsustainable it is expected to be in the long-term, as these would be non-optimal levels of nationalization.  Point M* can be appreciated in Figure 2 below.

ii) General asset social welfare waste: represents the inefficiencies  that accrue or accumulate when operating at levels of excess nationalization found at any point to the right of M*.  Social welfare waste can be partial or total.  For example, point T in Figure 2 below represents a point of full nationalization; and therefore, it is a point of total social welfare waste(section “a” and “b”) while point Q shows a place of partial welfare waste(section “a”) as it is somewhere between optimal(point M*) and total(point T) nationalization.

iii) General asset excess capitalism: refers to private use of assets beyond the optimal point of nationalization(M*), it can be partial or total.  For example, we can see in Figure 2 below that the private use to the left of point M* represented by section “e” is partial excess capitalism while operating private use at point W would be total excess capitalism.

iv) General asset Social welfare deficit: refers to the situation where nationalization stops to the left of the optimal point of nationalization(M*) leading to a situation where it is not possible to fully meet the social goals.  For example, we can see in Figure 2 below that if we operate at point K, and therefore to the left of M*, then we would have the social welfare deficit represented by section “f”.

v) General asset capitalism deficit: refers to the situation where we have excess nationalization.  For example, we can see in Figure 2 below that if we operate at the point of excess nationalization T, we have a privatization deficit represented by sections “d” and “c”; and if we operate at point Q, then we have a capitalism deficit represented by section “d”.

vi) General asset Soviet Union effect: refers to the expected system breakdown that results from operating at the point of full social welfare waste or point T in Figure 2 in the long-term. This effect may explain why the Soviet Union broke down under full excess nationalization and total privatization deficits.

vii) General asset full privatization effect: refers to the expected system breakdown that results from operating at the point of full excess capitalism or point W in Figure 2 in the long-term.  This effect may explain why the financial system broke down recently under full excess capitalism and total social welfare deficits.

viii) General asset principle of inverse action: If the road from full capitalism to full nationalization is fast to ensure system stability, then road from full nationalization to privatization should be slow, to remain stable.

e) Representing the commons as a rectangular specific asset inversegram

            The commons(C) can also be represented by a rectangular object  or cake made up of assets of national(N) and local(L) relevance under inverse uses nationalized use and privatized use as shown in Figure 3 below:

            Figure 3 above allows us to see that the commons(C) can be envisioned as a rectangular figure or cake that can be divided among different uses such as full privatized use(FP) or full nationalized use(FN) or compromised use(M) of assets of national(N) and local relevance(L).

i) Asset specific full nationalization(FN):

            Figure 3 above allows us to see the following: Line “a” indicates that all assets, national(N) and local(L), are nationalized; Line “b” shows that all national assets(N) are nationalized and some local assets(L) are privatized; and Line “c” demonstrates that some national assets(N) are privatized and all local assets(L) are nationalized;

ii) Asset specific full privatization(FP)

            Figure 3 above lets us appreciate the following: Line “e” indicates that all assets, national(N) and local(L), are privatized; Line “f” shows that all national assets(N) are privatized and some local assets(L) are nationalized; and Line “g” demonstrates that some national assets(N) are nationalized and all local assets(L) are privatized;

iii) Asset specific compromised use(M)

            Figure 3 above permits us to point out the following: Lines “d”, “b”, and “c” represent three different types of nationalization-dominated compromised use; and that Lines “h”, “f”, and “g” represent three different types of privatization-dominated compromised use.

f) Representing the optimal nationalization of the commons through the specific asset inversegram

            If we assume again that the optimal nationalization level is found at point M*, as shown in Figure 4 below, then we can use it to restate the following concepts:

i) Specific asset optimal compromise use: is the level of public use and the level of private use of national and local assets that meet at the point of optimal nationalization(M*).  Operating to the right or left of M* it is not optimal and the further away we operate from optimal M*, be it right or left, the more unsustainable we expect it to be in the long-term. Point M* can be appreciated in Figure 4 below.

ii) Specific asset social welfare waste: represents the inefficiencies  that accrue or accumulate when operating at a level of excess nationalization of national and local assets as found at any point to the right of M*.  Social welfare waste can be partial or total.  For example, line T in Figure 4 below represents a point of full nationalization of both national(N) and local(L) assets; and therefore, it is a point of total social welfare waste in assets of national relevance(N) as shown by section “a” and of assets of local relevance(L) as indicated by section “b” while any point of compromised used between M* and T would show a place of partial welfare waste in national and local assets.

iii) Specific asset excess capitalism: refers to private use of national(N) and/or local(L) assets beyond the optimal point of nationalization(M*), it can be partial or total too.  For example, we can see at point K in Figure 4 below that the private use to the left of point M* of national assets(N) as represented by section “d” and of local assets(L) as indicated by section “c” is partial excess capitalism while operating private use of national(N) and local(L) assets at point W would be total excess capitalism.

iv) Specific asset Social welfare deficit: refers to the situation where nationalization of local(L) and national assets(N) stops to the left of the optimal point of nationalization leading to a situation where it is not possible to fully meet the social goals.  For example, we can see in Figure 4 below that if we operate at point K, and therefore to the left of M*, then we would have the social welfare deficit in national assets(N) represented by section “d”; and a social welfare deficit in local assets(L) indicated by section “c”.

v) Specific asset capitalism deficit: refers to the situation where we have excess nationalization.  For example, we can see in Figure 4 below that if we operate at the point of excess nationalization T, we have a privatization deficit in national assets(N) represented by section “a”; and a privatization deficit in local assets(L) indicated by section “b”.

vi) Specific asset Soviet Union effect: refers to the expected system breakdown that results from operating at the point of full social welfare waste in national(N) and local assets(L) or line T in Figure 4 in the long-term. This effect may explain why the Soviet Union broke down into different states under full excess nationalization of assets of national(N) and local(L) relevance; and full privatization deficits in assets of national(N) and local relevance(L).

vii) Specific asset full privatization effect: refers to the expected system breakdown that results from operating at the point of full excess capitalism in national(N) and local assets(L) or point W in Figure 4 in the long-term.  This effect may explain why the financial system broke down recently under full excess capitalism in assets of national(N) and local(L) relevance; and total social welfare deficits in assets of national(N) and local(L) relevance, creating unsustainability within and between capitalistic countries.

viii) Specific asset principle of inverse action: If the road from full capitalism to full nationalization is fast, from national to local assets to ensure system stability, then the road from full nationalization to privatization should be slow, from local to national assets to remain stable.

 

g) Dwarf  country: refers to a state that is viewed as having a full use paradigm, but it does not as it in fact has a compromised use; it is neither this, nor that, but a mixed used model.

h) Dwarf  development: refers to the process that is viewed as reflecting a specific use development paradigm, but it does not as it in fact is being supported by a compromised use; it is neither this, nor that, but a mixed development model.

h) Dwarf  market: refers to a market that is viewed as being driven by free invisible hand, when in fact is being cleared by a regulated invisible hand.

The commons variability model

            If we think of the commons( C) as assets that can be under public use(G) or under private use(P) or in both uses at the same time or compromised use(GP), then it can be expressed as follows:

C = G + P

[continued]

By Lucio Munoz*

* Independent Qualitative Comparative Researcher / Consultant, Vancouver, BC, Canada   Email:   munoz@interchange.ubc.ca

Abstract:

            The ongoing implementation of liberal privatization policies despite open and increasingly generalized social discontent, especially in developing countries,  is leading to the search for efficient ways to counteract it.  The Soviet Union disintegrated in 1991 while resisting privatization pressure; and to avoid the same outcome, China took more concrete steps soon after the Soviet Union’s collapse going beyond those taken in 1978 to move from a system of full nationalization to allow slowly more and more controlled privatization.  This is a policy that continues today, which appears to suggest that the search for optimal levels of nationalization in China is ongoing right now to ensure over all system sustainability.  The 2007-2009 financial crises affecting western countries including the United States showed that fully uncontrolled markets can lead to system collapses too; and steps are being taken to ensure the existence of more controlled private forces.

            However, not much is written about the possible relationship between privatization  and nationalization processes and the possible existence of optimal levels of nationalization.  The main goal of this paper is to introduce new ideas, concepts, and analytical tools related to the commons under different pressures, which can be used to frame a possible point of optimal nationalization.

Introduction

a) Defining the commons

            The commons is a term that has been usually used to describe the pool of resources that belong to the public domain.  In other words, the commons is a public asset, either under specific, but unclear use or under communal use.  When the commons is under specific use and unclear access controls, the commons is bound to experience the tragedy of the commons(Hardin 1968) as rational actions or individuals would lead to its destruction.  When the commons is under communal use and clear access controls, the commons is bound to be nurtured, up kept, and protected(Rowe 2008), as again rational actions or individuals would lead to what the author calls “The happy commons”.

b) The commons and conservative policy

            In general, a conservative policy is directed at maximizing the allocation of the commons for social use in egalitarian ways and minimizing its privatization.  The allocation of the commons to social use is not based on how much income/resources the individual or group has, but on the individual/group’s right to access public resources to maximize social welfare and stability. Hence, social protection or social issues are of paramount concern.  For example, social concerns have traditionally been the driving force behind the search for equity in access to land in Latin America(Muñoz 2001). 

            This conservative approach is usually called the welfare state model, which uses distribution mechanism outside the market to achieve social harmony and avoid too rich, too poor power struggles.  The egalitarian role of the conservative state is not an easy one,  redistributive policies such as land reforms are difficult to implement and sustain unless there is a very strong political will and a very strong technical and non-technical grassroots organization(Adams 1995). 

            Hence, the central theme of this conservative state development approach is the notion that the author calls “Nobody is left behind” mode of government action.  However, public assets under the conservative policy of the commons are under constant pressure from private forces as they are not nationalised public assets, just public assets under communal and non-communal uses; and therefore, they are not outside the market’s domain.  For example, the wave of land reforms promoted by the World Bank in developing countries including in Colombia since the 1990s were done through market based approaches(González and Lopez 2003) as market mechanisms are supposed to be more efficient than non market approaches in redistributing land, in particular, and the commons, in general.  So as long as public assets are not nationalized they will be under the pooling influence of privatization pressures.

c) The commons and liberal policy

            The liberal policy aims at minimizing the use of the commons for social use and maximizing its privatization.  This is usually known as the liberal market model that is expected to sooner or later trickle down and based on perfect market assumptions.  The allocation of the commons to private use is then based here on how much income/resources the individual or group has as it is implemented through the free market.  Kelly(2006) points out that the conversion of the commons to private use in the USA intensified during the 1980s when the Reagan administration endorsed this policy as an efficient policy; and it was spread all over the world by institutions like the World Bank and the International Monetary Fund.  However, it was stressed recently that the perfect market under sustainability requirements is not sustainable(Muñoz 2001).   

                        The central theme of this liberal state development approach is the notion that the author calls “Only a few will be better off” mode of government action.  It is a fact, the rich are getting richer and the poor are getting poorer and governments are increasingly less able to meet the goal of “nobody is left behind” as the expected assumption of trickle down associated with privatization programs mentioned above has not materialized yet.  It was pointed out recently that the Embudo Effect explains why the rich are getting richer under liberal agricultural policies implemented under extreme inequality conditions(Muñoz 2009) as then the trickle down assumption does not work; and hence the Embudo effect allows most benefits to accrue to the rich.

            As privatization approaches the point of full privatization, social issues and goals will most likely not be met as whole states can be paralysed when corporate or immense market forces are not allowed to go the way they want to go.  Ramonet(1998) pointed out that as corporate mergers get bigger and bigger they have the cloud to transform countries into dwarf states and behave practically as they wish.  Hence, without nationalization or limits, the public system will tend towards the full privatization model in the long-term.

d) The commons, non-optimal nationalization and non-optimal privatization policy

            It seems that up to today, nationalization policies and privatization policies have been used or implemented with no optimal goals as guiding principles, which in the long-term leads to excesses and waste. 

i) Non-optimal nationalization policy

            Nationalization policy has been used as a non-optimal reactive, counter privatization policy to ensure social protection from uncontrolled capitalism instead of as a proactive optimal policy to ensure effective social protection while encouraging controlled capitalism. For example, the two main uses of nationalization policies under the banner of social protection are: 1) To protect remaining public assets from market forces or creeping development; and 2) To revert key private assets to public use.  For example, Gordon(2006) indicates that the 2006 nationalization of oil and gas industry in Bolivia was implemented under the goal of recovering state property and control; and therefore, as a reactive, specific sector counter privatization policy

            And hence the goal of nationalization, if there is one, is social protection, not optimal social protection.  Nationalization actions are taken without a clear idea of how much social protection is efficient protection.  Nationalization beyond the optimal point would lead to excess nationalization and waste. The author believes that how much of the commons is nationalized should be based on how much of the commons is needed to be under public use to meet national social goals/welfare; and that once that nationalization point is reached, the rest of the commons should be in private hands.

ii) Non-optimal privatization policy

            Privatization policy has been used as a non-optimal active, counter welfare state policy to ensure individual protection from an over controlling state instead of as a proactive optimal policy to ensure responsible capitalism and ensuring effective social protection. For example, the two main uses of privatization policies under the banner of efficiency are: 1) To open up remaining public assets to market forces; and 2) To promote a culture or need of more and more maximization or growth is better.  For example, the Commission on Growth and Development released a report with the aim of spreading the culture of more sustained growth is needed to push developing countries out of their development shortcomings(TCGD 2008). 

            And hence the goal of privatization, if there is one, is uncontrolled capitalism, not responsible capitalism.  Privatization actions are taken without a clear idea of how much capitalism will hinder efficient social protection.  Privatization far away from the optimal point would lead to excess capitalism and waste.  The author believes that how much of much of the commons is privatized should be based on how much of the commons needs to be left out under public use to meet national social goals/welfare; and that once that privatization point is reached, the rest of the commons should be nationalized.

iii) In summary:

            There is a need to avoid excess nationalization and to avoid excess capitalism, and to create a nationalization policy guided by the search for optimality or efficient social protection.  Such an allocation of the commons to public use would be an optimal allocation as it would allow meeting social/public goals while still permitting some controlled, but efficient privatization.  In other words, an optimal nationalization point would be the one that meets social goals while allowing controlled private forces to exist. 

e) The commons,  full nationalization, full privatization, and sustainability

            Sustainability suggests that full nationalization and full privatization processes will backfire in the long-term as they work outside sustainability principles.  Full nationalization leads to state/bureaucratic self-interest excesses; and full privatization drives towards individual/corporate self-interest excesses, which through time can lead to the system demise and/or model realignment, as detailed below.

i) The case of full nationalization

            The recent history of the commons under unrestricted full nationalization in the Soviet Union appears to indicate that full nationalization will be unstable in  the long-term as it creates operational inefficiencies, which without a private option are perpetuated.  It can be said that the Soviet Union era lasted about 74 years, it started with the Russian revolution of 1917 and ended with its dissolution in 1991.  It resisted the opening of doors to privatization until almost the end, when it was cash empty and short of food.  Gaidar(2007) points out in relation to the Soviet Union’s collapse the following: a) that the Soviet Union leadership ignored advice provided by key advisers in the late 1970s on the option to introduce privatization in the lines of that in China and so keeping stability and control, but they decided to follow a different route; and b) that the collapse could be understood simply by a story of grain(scarcity) and oil(mismanagement and unpredictable revenue).

            By discouraging privatization and competition and working beyond the optimal level of nationalization, the Soviet Union allowed the increasing accumulation of widespread state/bureaucratic financial, production, and resource use inefficiencies across the commons creating in the process, what the author calls in this paper, “excess nationalization, social welfare waste, and privatization deficits”, which rendered the system in the end politically unstable. 

            In other words, the unrestricted socialist program implemented by the Soviet Union operated under excess nationalization, social welfare waste, and privatization deficits, which long term led to a system breakdown.  Then, the quick privatization that followed the break-up of the Soviet Union helps us to see the social instability and health implications of privatizing all state assets too fast.  Stuckler et al(2009) found in a study of massive and quick privatization and health issues in former members of the Soviet Union that fast and huge national privatization programs have a significant impact in adult mortality trends.

            China on the other hand, started to allow privatization in the late 1970s in a very slow fashion, and it apparently quickly learnt the lesson from the experience of the Soviet Union described above to maintain political stability: i) The need to avoid social welfare waste; ii) The need to bring in controlled privatization below national level by allowing private forces to set up shop and access assets of local or provincial relevance; and iii) The need to bring change in slowly.  Hence, right now the Chinese system is slowly moving away from full nationalization and in that way maintaining political stability.  Cao(2000) points out the following: a) That since 1978 China has an open door policy towards international capitalism; b) That privatization in China has been planned to take place first, not in the state sector, but in a lower parallel sector acting as a social cushion with the possibility of later privatizing the state sector if all goes well; and c) That China has planned to implement capitalism through a socialist market. 

            Hence, the rise of privatization in China can be said to be a locally oriented slow process driven by a market under the spell of social goals.  In other words, China has planned the slow introduction of capitalism in the sectors below national or state relevant assets to maintain stability and insulate the state sector from expected or unexpected initial changes or shocks.  Breslin(2004) points out the following about the Chinese move towards capitalism: a) That China created a primitive state controlled hybrid system where a state public system and a non state, often local, private system now exist side by side; and b) That the process towards privatization has gone through three periods: policy reformulation period(1978-1984), Old system abandonment period(1984-1994); and the macroeconomic turning period(1994-to now). 

            See then that the private market in China is controlled by the state; and that China’s period of old system abandonment(1984-1994) coincides with the period of downfall and breakup of the Soviet Union(1985-1991).  And this indicates that China took into account the political instability leading to the breakup of the Soviet Union; and the fast privatization implemented by its former members after the breakup when deciding to take further steps towards more controlled capitalism.

            And currently, the experiences of the Soviet Union and of China with privatization are facts that perhaps are putting pressure on other countries under full nationalization such as Cuba to allow some type of controlled privatization too and move away from full nationalization.  Tamayo(1996) reported that privatization was already taking place in Cuba under official denials; THJ(2007) reported the expectation among participants in a panel discussion about the future of Cuba that Cuba was on the way to the free market economy; and TBI(2008) reported that Raul Castro is expected by observers to lead Cuba through a slow privatization process similar to that in China

            And perhaps, the experiences of the Soviet Union and that of China with privatization are lessons that current governments such as those of Venezuela and Bolivia should take into account to start thinking about nationalization policy from the optimal point of view, not based on the old reactive model, to achieve efficient social protection and controlled, but efficient privatization.  It has been reported that nationalization policy is sweeping Venezuela under President Hugo Chávez(Ingham 2007) with more intensity.  Hults(2007) points out the following: i) That nationalization started in Venezuela 1975, when then-president Carlos Andrés Pérez expropriated assets from private oil companies and created the state company Petróleos de Venezuela, S.A; and ii) That nationalization pressures intensified when President Hugo Chávez won election in 1998 as when entering office in 1999, he began implementing policies aimed at taking control of this state company to support nationalization’s aims.  Now, nationalization in Venezuela has spread to other sectors in the oil industry such as oil service contractors(Arostegui 2009) and to other sectors of the economy such telephone, electricity, and now banks(Simon 2009).

            On the other hand, it has been stated that the election of Evo Morales as president of Bolivia in 2006 has been taken by observers and investors as another sign that Latin America is going left, increasing the nationalization risk(Zissis 2006); and that the 2006 nationalization of the Oil and Gas sector in Bolivia is the third out of four nationalization attempts since 1936 in the same industry(Jova 2006).

ii) The case of full privatization

            The recent history of the commons under unrestricted full privatization and globalization in the USA and other developed countries appears to show that full capitalism will be unstable in  the long-term too as  privatizing the commons above and beyond what is needed to meet social/state goals or far away from the optimal level of nationalization brings in long-term unsustainability.  The recent financial crisis exposed the need to make capitalism a socially responsible and accountable system and move it away from its irresponsible past.  Mcintosh(2010) pointed out in his foreword piece of “Capitalism in Question” with the financial crisis in the background the following: 1) That economic governance needs a big overhaul; 2) That the model of economic growth itself has now fallen into question; 3) That a model that provides both private and public benefits at the same time is now desirable; and 4) Then we can have a society that is sustainable.

            Hence, free capitalism is leading to the increasing accumulation of widespread individual/ corporate self interest excesses or inefficiencies across the commons, creating in the process, what the author calls in this paper, “excess capitalism and social welfare deficits”, which are capable of rendering the system in the end politically unstable and lead to system breakdown and/or realignment.  Truman(2009) pointed out four types of possible causes behind the 2007-2009 financial crisis: 1) macroeconomic shortcomings; 2) regulatory shortcomings; 3) abuses in promotions of new and little understood financial instruments; and 4) abuses in exposure or risky behaviour, but he felt that in his view macroeconomic and regulatory failures were at the heart of it.  However, IBT(2010) reported in January 2010 that Mr. Lloyd Blankfein, Goldman Sachs CEO, blamed excess credit and excess liquidity as the main drivers of the financial crisis when addressing The USA Financial Crisis Inquiry Commission. Notice that all of those causes are in one sense or another excesses which are expected under full capitalism so it can work as efficiently as those financial officers expected it to be, but they underestimated  or did not care about the social pain and flashback associated with it.

            Apparently, the USA and other developed countries have quickly learnt the lesson from the excesses described above, the need to avoid unrestricted capitalism and to avoid the presence of social welfare deficits to maintain political stability as they have recently  taken coordinated leadership in implementing regulatory measures that will avoid corporate/individual excesses and that will achieve more predictable social protection.   President Obama is planning to take action right now on limiting the activities and size(WH 2010) and the risk taking behaviour(TWSJ 2010) of banks.  Hence, right now the USA system is in the process of slowly moving away from full unrestricted privatization towards more controlled privatization and maintaining that way political stability. The European Union has been coordinating regulatory and crisis recovery actions with the USA since 2008 when the EU leadership called for the realignment of the international financial framework(EC 2008); and right now they are pursuing an ongoing coordinated response to seeking tighter financial rules within their borders and internationally to address now well-known system flaws(EC 2010).

            And currently, the experiences of the USA and other developed countries with unrestricted privatization are facts that perhaps are putting pressure on other countries, especially developing countries around the world to control more closely their local privatization programs and speed; and move away from local unrestricted privatization programs as they do not have much control over the forces behind international capitalism.  Soon after the financial crisis stroked in 2007, the World Bank moved to point out the high vulnerability developing countries, especially the poorest ones, have when facing an international financial crisis that is not of their making; and it challenged policy makers, among other things, to take actions to address their financial crisis in a way that do not push developing countries to worse development conditions than before the crisis(TWB 2008). 

iii) In summary:

            Historical facts appear to suggest that full nationalization scenarios and full privatization scenarios do not meet the true sustainability test in the long-term, that where social, economic and environmental values can be conjecturally met; and therefore, they should be avoided.  This suggest that if sustainability is the goal, the aim is then to find an optimal level of nationalization, the point where social goals are met and excess privatization avoided; and therefore, there is a need to avoid processes of full nationalization and of full privatization. 

The need to identify conditions leading to optimal nationalization policies

            Hence, nationalization policy and privatization policy have been used as non-optimal opposing tools, not as optimal tools for effective social protection.  Yet, not much is written about the relationship that may exist between privatization processes and nationalization processes; and about the nature of possible optimal levels of nationalization, levels where social/public goals are achieved while providing some room to efficient private forces. This paper intends to share some ideas on the issues mentioned above.

Goals of this paper

            The main goals of this paper are: a) To show that nationalization can be understood as privatization in reverse; b) To point out how these ideas can be arranged in a way that it is possible to point out a possible level of optimal nationalization; and to highlight the consequences of operating short or beyond of it; and c) To use the framework mentioned above to capture the process by which China is right now slowly moving away from full nationalization and going towards the optimal nationalization point; and to stress the implications of this.

[continued]

copyright 2010 Lucio Munoz and the Journal of Sustainability

by William (Bill) Wiley P.E., wileywun@gmail.com

In Building a sustainability program, it is important to not trip over these common mistakes.  A successful sustainability effort takes time and you will make mistakes- but a little forewarning may help ease your way.  Some of these are simple and readily apparent, other may take more thought and commitment.  In any case you are now aware.

Buying compostable or recyclable materials without the means to compost or recycle them. Many products today proudly proclaim their recyclability or compost ability, but be careful. Many compostable products require specific conditions( e.g. temperature, humidity, etc) Likewise many  recyclable products make sense where there is a local facility that accepts them. Failure to look at these important issues before you commit can leave egg on your face.

Carbon footprint vs. Ecological footprint.   Although it’s a prerequisite to understand your “carbon footprint” today, do not overlook the other aspects of your project or proposal.   It does you little good to focus on CO2 reductions when you increase water use or increase land disturbance.   An interesting case study is the controversy over Concentrated Solar in Arizona.

Use of manufacturer’s claims for your application. Many products today come with broad claims of saving  X amount of water or reducing CO2 emissions by Y amount annually.   These claims are usually based on  ‘best case’ conditions and clearly do not match your use. As an example, a waterless urinal manufacturer ‘s  claim of saving up to 40,000 gallons of water annually per fixture, did not hold up in computing  actual usage in a  high-rise building with multiple fixtures , a higher female/male ratio and where fixture replacement was  from existing low flow fixtures.   An important corollary to this example is to not use these claims in calculating YOUR ROI on this investment.

Use of Recycled amount or Recycled percentage as a metric.   Recycling is good, but it should not be the ultimate goal. Your goal should be to increase material use efficiency and reduce that not used, whether it goes to a landfill or is recycled. A mature program should actually reduce its material recycled over time.

Failure to engage your employees.   Employees are an organization’s ambassadors to the world. They interact with stakeholders of all kinds at schools, churches and even at grocery stores.  In today’s social media world, they also may ‘talk’ to people around the world.  In many cases, they carry more credibility than the official company spokespersons (think BP). Failure to educate and interact with them on a regular basis will undermine your effort.

Doing  ‘Sustainability ‘without having good risk management and compliance programs in place. Nothing can undo all your good work sooner than multiple NOVs or a major faux pas.   For example, a public ethical lapse or a major spill can destroy  a reputation instantaneously .   Aramark CEO Joseph Neubauer said it well when he said:  ”It takes a minute to undo what it took a lifetime to build.” 

Lack of a Sustainability  governance structure. Many organizations give the sustainability program to an enthusiastic employee and send them away to do good often with the admonition to keep costs down. This is a recipe for failure.  Lack of support from the C-suite, including authority to build an internal governance/implementation structure will doom your program to be just another initiative.

Green only. In the media, sustainability is often portrayed as an environmental program or initiative. Getting past this “green only’ concept with all your stakeholders (including employees and management) is a difficult, but critical step.   Broadening your program to address your customer needs, employee health and safety, local community support, etc.  is just as important  to the sustainability of your organization as are the traditional environmental and financial metrics.

Save money only. Part of the recognized benefit of sustainability is looking at ways to be more eco-efficient, often by tackling those low hanging fruit.  If you use resources wisely, you can reduce costs and reduce waste.  Both can save your organization money.  However, at some point in your program you will likely have to spend some capital to buy more efficient variable speed motors, hybrid vehicles or upgrade air conditioning,  as examples. Failure to invest will limit your potential long-term benefits.

Failure to stay up- to date.   Your customers, stakeholders, investors, and regulators are all revising their views of the world and what they deem important.   For example, Wal-Mart’s supplier initiative was a big wake-up call to many companies, especially those that ended up losing business.  Similarly, shareholder initiatives on carbon disclosure and transparency caught many major companies off guard. Finally, Twitter and Facebook and numerous blogs can radically and quickly affect your company image – as well as your next day at work.

These are a few of the common mistakes that organizations make in their sustainability journey.  With that said, everyone makes mistakes and unless they are fatal you can survive and build a sustainable organization that we all can be proud of.   For more tips see my earlier article on implementing a sustainability program, Lessons from the Sustainability Trenches.

References:

Neubauer, Joseph.    Reputation Rx:  CEO Quotes http://www.reputationrx.com/Default.aspx/CEOREPUTATION/CEOQUOTES

Wiley, William D. PE, 2010, Lessons from the Sustainability Trenches; 14 Tips to Achieve Sustainability in Journal of Environmental Management, June 2010.

About the Author

William (Bill) Wiley P.E. was Senior Manager for Sustainability for Arizona Public Service Co. from 2007 through 2010.  He is also adjunct professor for University of Phoenix, teaching science and ethics classes. From 1991 through 1994, he was Deputy Director of the Arizona Department of Environmental Quality. He is registered Professional Engineer in Arizona and has several publications on water, business process improvement and environmental management.

Copyright 2010 Journal of Sustainability (format) and Bill Wiley  (content)

  An ''old lefty'' friend of mine has retired to an idyllic  Caribbean isle. Sort of idyllic, if you ignore the cardboard shanties. Ken built himself a castle, [fortified.] There he putters in his garden, writes his Marxist blog and plays the stock market. He also gives lots of money to good causes, which makes him feel very good. Curiously I happen to have another friend here in the US, a native of this island. His feelings about Ken are somewhat different. "I hope he understands, that when the revolution comes, we will kill him."

   May has dedicated her career to avant guard installation art. Her most recent show featured an artist who piled 13 tons of some unspecified industrial waste on the gallery floor. It smells. The critics were thrilled. "Ms. X's installation deals with issues of consumption and toxicity."  One might ask just how it "deals" with those issues. It doesn't really say anything. It's just there. My suggestion that one might actually consider these very issues in selecting a piece was met with a firm refusal.

"Good art is never polemical."

  And Kim, an Albanian-American albino atheist, who has become quite wealthy selling insurance. But nevertheless quite bitter. "If I had been a white, [instead of WHITE,] Presbyterian I would be much richer." Kim sees this as a massive social injustice, somehow equal to that suffered by victims of actual famines and wars. [Sadly the other children did say mean things back in grade school, but today Kim does belong to the country club.]

   And Martin. Heir to a big hunk of a major timber fortune, He also feels very good about all the money he gives to the Sierra Club. The way he sees it, is that if he didn't make all that money from the bad things daddy's company does, he wouldn't have it to give to the good causes. Or take "eco-vacations" with the carbon footprint of Godzilla. The mind boggles.

   So----------- I am Mr. Critical. I do not shy away from judgement. I will happily  point out that something is wrong here. [As I learned from Mr. Wilbur, when someone tells you that being judgemental is bad, something fishy is going on.] But just what is wrong here?I am not suggesting, for example, that making money is evil. I would like a great deal more of it myself.

   When you talk with Ken, what quickly comes to the surface is his bitterness. He is a brilliant guy. An astute political analyst. And a very witty writer. And no one pays any attention. But then, why would anyone pay attention to the rich guy  spewing  Marxist rants? It's the guy in the street, in the trenches, who has the authority, who gets the respect as a revolutionary. [And the rich guy who gets respect as an investment advisor.]

by Barry Carter, bcarter@igc.org

Web Pages:
ORMUS - http://www.subtleenergies.com/ormus/index.htm
Forest - http://www.subtleenergies.com/ormus/bmnfa/index.htm
Donate - http://www.subtleenergies.com/ormus/donate.htm

Most people have a favorite disaster scenario. Some favor global 
warming, others favor peak oil. Financial collapse is the favorite of 
many people but geological cataclysm is favored by others. Regardless 
of which disaster you may favor, the most immediate problem that 
develops, as a result of any disaster, will be related to food 
shortages. Already it is estimated that one billion people are 
starving on earth.

Most disasters reduce food production or availability. Climate change 
causes flooding, drought and unseasonable freezes which all reduce 
food production. Peak oil reduces the availability of petro chemicals 
for fertilizer and pesticides as well as the fuel to transport food 
for long distances. Financial collapse makes it more difficult for 
everyone to produce and purchase food. Geological cataclysm can even 
cause an ex-president to apologize for policies that reduced the 
local food supply in Haiti in favor of imported rice from the USA.
Even social disasters are most likely to cause suffering through 
starvation. When the structures we have built to serve us loose their 
way and begin to believe that we are here to serve them, they try to 
monopolize our sources of supply. Whether these are corporate 
structures, government structures, belief structures or religious 
structures does not change this pattern.

Regardless of one's favorite disaster scenario, certain things can be 
helpful for the people in our communities. Here are some things that 
I think we all need:

Clean air to breathe.
Clean water to drink and bathe in.
Nutritious food to eat.
Energy for heating, cooling, lighting, transportation and communication.
Materials for making and modifying the structures we live in and 
the clothing we wear.
Good health.

Since many people cannot do a lot in their daily lives to insure that 
they have:

Clean air to breathe.
Clean water to drink and bathe in.
Energy for heating, cooling, lighting, transportation and communication.
Materials for making and modifying the structures we live in and 
the clothing we wear.

I think it is most worthwhile to focus on doing what I can to insure 
that my local community has:

Nutritious food to eat.
Good health.

In service to these goals, I have been gardening organically since 
1969. I believe that the more available this kind of info is, to the 
people on the ground, the more all will benefit.

I am also engaged in a related area of "grassroots" research. Several 
hundred non-academic researchers around the world are exploring the 
agricultural and social implications of some newly rediscovered 
minerals that significantly improve the growth, taste and nutrition 
of food grown in soils where they are applied. We have accumulated 
many reports of significantly increased plant productivity, 
nutrition, freeze tolerance and drought tolerance.

These minerals can be concentrated using simple kitchen chemistry on 
sea water or rock source materials. (Anyone with access to fire and 
salt water can concentrate them.) They can also be concentrated from 
the air or from fresh water using simple mechanical "traps". You will 
find a number of links to pages which describe the results of using 
these minerals for plant growth at:

http://www.subtleenergies.com/plant-lynx.htm

The simplest method for concentrating these minerals from sea water 
is also described on the page above and other open-source methods are linked.

I think that it is also helpful to realize that growing soil 
increases carbon sequestration and that the use of these minerals 
with keyline plowing has doubled productive soil depth in one year.

The best way to guard our life on Earth may be to garden locally.

copyright 2010 Barry Carter and Journal of Sustainability

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