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A Business Built for Resilience

by James Magnus-Johnston

Johnston_photoWhat does business look like in a steady state economy? I’m often asked whether or not a steady state economy would somehow lead to the stagnation of free enterprise. Yet all around us today, we’re witnessing the flourishing of ‘social enterprise,’ a business model designed to maximize human and environmental wellbeing rather than accumulate profits for shareholders. From not-for-profit and cooperative models to the birth of the B Corp (benefit corporation), we find ourselves in the midst of a profound shift in business–away from growth and profit as an organizing principle, and towards one that respects the social and ecological limits to growth. With a planet under profound stress and a Ponzi-inspired economy poised for decline, there’s no harm in trying something a little different.

As policymakers waste time hand-wringing about embracing alternatives to growth, social enterprise provides individuals and communities with the ability to demonstrate the viability of the post-growth paradigm. Measuring social and ecological outcomes can be challenging, but some models (such as the B Corp) have adopted a specific method to measure outcomes using a point-based system. Others are using simple tools to reduce waste and ensure a fairer, more equitable working environment.

Fools&Horses

I have recently been involved in starting a pair of social enterprises, which stand as humble examples of business models for resilience rather than growth. The first is RISE Urban Incubator, which promotes and mainstreams innovations to reduce waste; the other is Fools & Horses, a coffee shop with a triple bottom line. Both businesses have been structured according to a relatively simple principle–do more good than harm–by tackling problems such as inequality and environmental degradation. Fools & Horses was named after the beloved British sitcom Only Fools and Horses, about a group of people who spend all their time trying to come up with “get rich quick schemes” and, ironically, work all the time. What better way is there to describe an economy designed for growth-at-all-costs?

Our Fools & Horses wants to demonstrate the benefits of a more flexible, equitable work arrangement for its employees. Workers earn a living wage when they join us, are invited to have a say in how the business should be run, and are given the opportunity to become owners. Worker-owners look forward to more than the accumulation of money and a periodic hike in their hourly rate. They are given greater autonomy in their work, freedom to experiment and innovate according to their talents, and enough flexibility in their schedule to pursue other interests or spend time with family and friends. Autonomy and flexibility are not just tolerated, they are encouraged.

More interestingly, perhaps, the coffee shop is designed to provide the incubator with the cash it needs to experiment with projects that systemically reduce waste, including the use of permeable pavement and solar technology. Any waste streams we do have are audited so the businesses will offset more waste and emissions than they create.

The businesses have also been designed to provide benefits to the local economy by keeping dollars circulating locally. Fools & Horses is designed to re-localize the economy wherever possible by supporting budding entrepreneurs in the local food industry, including farmers, bakers, craft brewers and roasters, and chefs. Eventually, we hope to help foster a network of local suppliers, which also helps reduce fossil fuel requirements. Each of our producers offers only the highest-quality products, fostering an economy of quality rather than an economy of quantity.

There are other sustainable business models out there, and people doing far more important and captivating things to shift the economy in a new direction. But this is one example of a small effort to demonstrate the shift in thinking at the macro level. One of the other, less intangible things Fools & Horses will foster is a sense of conviviality and good living. In Dutch, it’s called ‘gezellig,’ and in German, it’s called ‘gemütlichkeit,’ both of which connote a sense of warmth, coziness, and belonging. In a steady state economy, what we need to accomplish above all else is the re-connection of people with one another. Perhaps it says more about the present state of business–and the prevalence of monopolies–that it’s considered novel to do so.

Surely We Can Do Better than Nuclear Socialism

by Brent Blackwelder

They were in the news a half century ago when they were called “too cheap to meter.”  Now “absolutely safe” nuclear reactors are once again in the news.  As the horrifying scene in Japan unfolds this month, many politicians and media pundits are acting as if the only electricity choice for the U.S. is nuclear reactors or coal power plants.  This is a false choice.

A sustainable economy requires a sustainable energy supply, one that is not subject to the vulnerabilities of big central energy systems.  A steady state economy would run on a decentralized set of renewable energy sources that is clean and resilient.  It would be an economy powered by the sun, the wind, the natural heat content of the Earth, and other renewable sources. Advanced designs for where we live and how we travel would be a key part of this energy transformation. For example, buildings would be designed to generate power rather than requiring external energy supplies for cooling and heating.  And let’s not forget about conservation – we need to set up the economy such that it uses less energy in the first place.

The energy system that would run a steady state economy does not have the severe security problems that plague current systems, nor would it require massive subsidies in the form of liability limits, loan guarantees, externalization of  health damages, etc.  You don’t have to worry about a solar or wind “spill” contaminating the air, land and water; you don’t need liability caps for a wind farm or for solar collectors on roofs; and finally, you don’t need to bill consumers (instead of stockholders or investors) in advance for a nuclear reactor that may never be completed.

The strength and resilience of decentralized power, its superior employment intensity, and the potential for community involvement are all features that make a different energy model very attractive. Various European nations such as Spain, Germany, and Denmark have demonstrated the huge potential of wind and solar power, as has the state of Texas in the case of wind with 9,700 megawatts installed.

But look at the powerful forces today pushing nuclear reactor construction in the southeastern U.S. and obstructing the clean energy path of the future.  Even after the terrible nuclear meltdown in Japan, two big southern utilities, South Carolina Electric & Gas and Georgia Power, announced that they are not pausing to consider some lessons to be learned before proceeding full speed ahead with four new reactors.  To pay for two new reactors at Plant Vogtle, Georgia Power has begun billing its Georgia customers this month for the intended construction. Ironically, the proposed new reactors being billed to Georgia consumers are intended to supply customers in Florida.  Consumers and taxpayers are bearing all the risks, not investors.

The energy systems used to power the global economy are highly vulnerable to extreme weather events, sabotage, terrorism, and war.  The Japanese catastrophe this month certainly brings to mind the nuclear disasters at Chernobyl in 1986 and Three Mile Island in 1979.  But the nuclear and fossil fuel industries have supplied many less well-known disasters.  A brief  review of some of the accidents will accentuate the difference between the polluting energy of today’s economy and the clean energy future that would, by its very nature, avoid these messes:

  • In  July of 1979, at the Navajo community of Church Rock, New Mexico, an earthen dam at United Nuclear Corporation’s uranium mill broke, releasing 95 million gallons of radioactive wastewater into the Rio Puerco.  The spill sent contaminants over 100 miles downstream.  This unpublicized spill is estimated to have contained over triple the amount of radiation (curies) that the Three Mile Island nuclear reactor released in the very same year.
  • Last year tornado warnings near Detroit forced the shutdown of the Fermi 2 atomic reactor.  This was the same site where a meltdown in 1966 nearly irradiated the Greats Lakes Region.
  • For much of 2010 the BP oil spill in the Gulf of Mexico was an ongoing saga of futility and despair.
  • In July of 2007 a major earthquake in Japan badly damaged one nuclear reactor in a complex of nuclear reactors.
  • In December of 2008 a Tennessee Valley Authority reservoir, which was storing the contaminated ash from one of its power plants,  burst and  sent a toxic stew of waste 100 times larger than the Exxon Valdez oil spill into a tributary of the Tennessee River.  Despite assurances that such dam bursting was unusual and would never happen again, scarcely a month had passed when yet another coal waste reservoir (this one in Alabama) failed and spewed contamination downstream.

Vulnerability lessons are not new.  After World War II German military leaders pointed out that the U.S. could have ended the War two years sooner by bombing the big coal power plants. Instead the allies were bombing individual industrial sites like steel mills, failing to recognize that the big coal plants powered 80% of Germany’s manufacturing.   In contrast, Japan’s electric power was provided by a huge number of small dams that were not attractive targets for attack because no single one was crucial for the power system of the nation.

The energy for a steady state economy can be supplied by a huge number of solar panels and wind mills as outlined by physics professors Jacobson and Delucchi at Stanford University (Scientific American, November, 2009) and by many others.  It would be a refreshing change to see President Obama propose such an ambitious solar/wind plan in the aftermath of the meltdown in Japan, but he seems content merely to suggest a thorough review of nuclear reactors.

Before having to hear how high the costs of renewable energy are, I’ll close with a brief reminder of the government subsidies the U.S. nuclear industry is slated to receive.  Here are some components of the $46 billion being offered up over the next 5 years in addition to the cap on liability for any accident:

  • $22.5 billion in loan guarantees for new reactors;
  • $12.3 billion in nuclear waste fund liability payments;
  • $3 billion for mixed oxide activities; and
  • $1.9 billion for fusion energy.

For more details, please see the green scissors report.

Seeing this list of handouts, one might think that Republican leaders would recoil at what might be termed nuclear socialism.  One would think that the Tea Party activists would revolt at the sight of this massive government program to fund something that Wall Street would not touch even before the catastrophe in Japan.