rmisolutions newsletter 5 · 2020-03-20 · tricity created by central power plants—a system that...

5IT’S RARE WHEN DISCUSSIONS OF A

commodity dominate dinner-partychat, but that was the case on many

California patios this summer. Andeveryone seems to have an opinion aboutwhy the lights went out in San Franciscofor several hours one day in June, why res-idents in San Diego saw their summerelectric bills double, and why dire publicwarnings to reduce electricity use or riskblackouts have become commonplacethroughout the Golden State.

Once heralded as the nation’s leader inrestructuring its electric utilities and cre-ating competitive markets for electricity,California is rethinking the wisdom of itsactions. And the rest of the country iswatching. All 49 other states and the fed-eral government are considering restruc-turing the electricity industry in theirjurisdictions. They can learn fromCalifornia’s mistakes—or repeat them.

When it comes to essentials like electricity,the public is of two minds about marketsand competition. Enthusiasm is strongwhen markets deliver lower costs or

RMISolutionsRMISolutionsn e w s l e t t e r

Rocky Mountain Institute/ volume xvi #2/fall/winter 2000Rocky Mountain Institute/ volume xvi #2/fall/winter 2000

CONTENTSTHE IMPACT OF GLOBALIZATION . . . page 4

NAT CAP IN CLEVELAND . . . . . . page 6

DESCARTES MEETS DARWIN . . . . page 7

DEAR ROCKY . . . . . . . . . . . page 9

AUSTRALIA’S CLIMATE CHALLENGE . page 10

CHINA:OVERCOMING COAL. . . . . page 12

THAT’S LEADERSHIP . . . . . . . page 14

HOT SEAT. . . . . . . . . . . . page 16

RMI NEWS . . . . . . . . . . . page 18

LIFE AT RMI . . . . . . . . . . page 21

THANKYOU,DONORS . . . . . . . page 27

STRATEGIC INFLUENCE IN CANADA . page 31

ELECTRICITYSUPPLYMYTHS

A wind farm insouthernCalifornia:the electricitysupply is in-creasing, justnot in the waymost peopleexpect.

c o n t i n u e d o n n e x t p a g e

CALIFORNIA’S

by Thomas Feiler

photo: Norm Clasen

greater value, but ebbs quickly when mar-kets produce pain.

This past summer’s market volatilityoffered a vivid reminder of the funda-mental dependence of the economy andsociety on reliable electric power. For agrowing number of high-tech companies,the cost of even tiny outages can be spec-tacularly high. Increasing demand for reli-able power has heightened politicalreactions and the search for quick fixes. In

one of the bigger ironies of the electricindustry restructuring debate, former free-market proponents are proposing increasedgovernment regulation, mandatory mem-bership in industry organizations, central-ized governance of grid operations, andgovernment price controls.

In thinking about appropriate responses, itis helpful to look past five troubling mythsnow circulating about the cause of therecent problems and the role of competi-tion in the electric power industry.

Myth #1: The electricitysupply system is failing

California’s power supply crisis has comeeven though none of the state’s powerplants or transmission lines has failed. Infact, many parts of the system that weresupposed to be taken off-line for regular

maintenance and repair continued tooperate throughout the summer, provingthat the electricity supply infrastructure isin fine shape.

However, the entire electrical system—thegrid—is vulnerable. Four summers ago, aseries of technical and human failures on ahot August day knocked out power toabout 7.5 million customers in eightwestern states and British Columbia. Thatdisruption, the second worst ever experi-enced in the United States and the worstto hit this region, can be traced to the

inherent instability ofa system that isdesigned around asmall number oflarge, centrally con-trolled facilities.

Simple and cost-effective ways toincrease the relia-bility, resilience,and stability of thesystem, such asusing small-scale,

distributed generation technologies andend-use efficiency, are well known withinthe industry, but have not been pursuedwith any discipline or enthusiasm by thetraditional utilities. The utilities are used todoing business the old way, delivering elec-tricity created by central power plants—asystem that is easily controlled and monop-olized, but vulnerable to large-scale disrup-tion.

Myth #2: Competitivepower markets are toblame

California’s power problems are not thedirect result of competitive markets, butrather of a lack of robust competition inthe markets. The structure of the newpower markets, after all, was designed toserve not only economic efficiency but also

political objectives. As a result, the type ofcompetition that the new market has deliv-ered is imperfect and immature in somevery importantways thatcannot beexplained byeither classical economics or conspiracytheories. Most notably, the architects ofthe market focused almost entirely on thesupply side of the business (and the polit-ical deals necessary to get the buy-in of thethree large California utilities) but neg-lected, and in some cases obstructed, theability of consumers to obtain energy serv-ices in more rational and cost-effectiveways.

In this half-baked competitive environ-ment, the wholesale power markets arebehaving rationally, although quite errati-cally, to supply and demand signals. SanDiegans’ electricity bills doubled becauseSan Diego Gas & Electric executives gam-bled in the marketplace and lost. Ratherthan secure supplies in advance to meettheir customers’ summer needs, they gam-bled that they could buy cheap electricityin the spot market, and that rising summerdemand wouldn’t drive prices up. Bothbets were terribly wrong, and now theircustomers are left holding the bag.

The good news is that because of restruc-turing, Californians can now choose from arapidly growing number of alternative elec-tricity suppliers (with several offering envi-ronmentally friendly renewable electricity)that might take a more measured and cau-tious approach to purchasing electricity fortheir customers. Consumers were initiallyslow to realize they could switch elec-tricity companies, but a growing number ofSan Diegans are now voting with theirfeet. Such signals should motivate utilitiesto improve their practices.

e n e r g y

c o n t i n u e d o n p a g e 2 2

California’s power problemsare not the direct result ofcompetitive markets, butrather of a lack of robustcompetition.

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AS THIS ISSUE OF RMI SOLUTIONS

came together, it took on a geo-graphic perspective.

You’ll find insight into the causes of Cali-fornia’s spike in electricity prices, whyChina’s consumption of coal is down, howthe fight to limit greenhouse gases in Aus-tralia is going, why the Canadian financeminister sounds more like an environmentminister, and what manufacturers inCleveland are doing to put into practicethe principles of Natural Capitalism.

RMI staffers fanned out across the globethis year to work on different projects, andit spurred our reporting on topics asdiverse as the green Olympic village inSydney and why Taiwan shouldn’t com-plete its fourth nuclear power plant.

Also in this edition, you’ll find some newfeatures. We’ve added “Hot Seat,” a forum

in which readers areinvited to pose ques-tions to RMI aboutthe contents of the newsletter.

We’ve created a guest column slot, called“Other Voices,” to showcase complemen-tary ideas and insights from colleagues out-side RMI. We found the inaugural columnby Harlan Cleveland to be a thought-pro-voking piece on how the world ischanging, and will continue to change.

Making a return appearance in this issue is“Dear Rocky,” a feature where we share afew of the hundreds of questions posed toour outreach specialists each year.Answering these questions is a big part ofRMI’s mission, and we devote a consider-able amount of our time and energy tobeing a clearinghouse of information forpeople trying to make a difference.

Finally, “BoardSpotlight” intro-duces the vital,interesting, andexceptional peoplewho serve onRMI’s Board ofDirectors. The first

spotlight is shining on Christine Loh, whohas made waves as a member of HongKong’s legislature and now as a citizenactivist trying to improve the city’s envi-ronment.

I hope you enjoy this issue.

by Brent Gardner-Smith

by Dale Levy,DevelopmentDirector

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colleagues, and developed more features—including a reader feedback section. Wethink the newsletter is significantly betterthan it was last year.

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As we made changes to the newsletter andreflected on the costs of production, paper,and postage, we began wondering: howmany people on this list are still interestedin receiving this newsletter and are currentRMI supporters?

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EDITOR’S NOTE

page 3F a l l / W i n t e r 2 0 0 0

Many people watched therecent protests againstglobalization in Prague,

Melbourne, Washington, and Seattle, andwondered what all the fuss was about.Few would dispute that globalization hasbecome a source of dissension, but fewercan describe the issues, and fewer stillknow what to do about them. Once anacademic topic for policy analysts, global-ization is now inciting demonstrations on ascale unseen since the Vietnam War.

Part of the problem is that the world as weknow it is changing rapidly, and increas-ingly no one is in charge. The fall of theBerlin Wall and the apparent triumph ofcapitalism worldwide, and the spread ofcommunications and information tech-nology bringing the ability to move capitalaround the world at the stroke of a com-puter key, have fundamentally changed theway the world works. Increasingly such

changes are affecting not only Wall Streetand Main Street, but even rural villages inthe developing world.

WHAT’S THE FIGHTABOUT?

Advocates of globalization argue that trademust be the preeminent objective of inter-national agreements, and that other con-cerns are legitimate only to the extent thatthey don’t inhibit the free movement ofgoods and financial capital. This viewholds that free trade will expand economicopportunities and “lift all boats.” Oppo-nents, they argue, are protectionists orMarxists.

Nations that trade, advocates claim, willnot go to war with each other. Globaliza-tion will spread the Western liberal valuesof democracy and human rights, andunleash competition that favors excellence.Trade will empower a middle class that

will demand greater democracy and ulti-mately greater protection for the environ-ment. The World Bank, the InternationalMonetary Fund, and (much more recently)the World Trade Organization werefounded to advance this agenda. The pro-testers may not like it, but nearly everycountry in the world is a WTO member,and none has resigned. Even China nowseeks membership.

Opponents of globalization include peopleand organizations with very diverse con-cerns, cultures, and goals. They tend toagree, however, that the benefits claimedfor globalization are illusory, or accrue onlyto elites. The WTO, whose meeting inSeattle the protesters disrupted, is seen asthreatening hard-won treaties and locallaws that protect the environment andhuman rights.

The existing trade regime, opponents say,is worsening the disparities of wealthbetween haves and have-nots in the globaleconomy. They challenge not only themultilateral institutions but also the verymerits of free trade, calling for a relocaliza-tion of finance and of decision-making.Preferring local and national self-determi-nation, some demand the outright elimina-tion of the WTO and a rolling back ofglobalization.

Some critics also decry, with farmer/poetWendell Berry, the homogenization andcommoditization of all goods, so that theirstory is lost and customers can’t makeresponsible decisions about whether to buythem. The meat in Swiss village butcher-shops is labeled with the name of the farmit came from, so good farmers can berewarded and bad ones penalized in the

page 4

NATURAL CAPITALISM

by L. Hunter Lovins

Join discussions on globalization andNatural Capitalism at www.rmi.organd www.naturalcapitalism.org.

theIMPACT of globalization

F a l l / W i n t e r 2 0 0 0

local marketplace, but this is lost whenmeat becomes anonymous on a super-market shelf. Wrapped in this concern areprofound questions about social fabric,appropriate scale, and human purpose.

The WTO has critics within itself, withdeveloping countries claiming that the richhave set the rules to their unfair advan-tage. Many observers of the Seattlemeeting predicted that a stalemate wouldhave occurred even if no protestors hadshown up. They point out that WTOmember nations do not even accede to theorganization’s rulings. The protests inSeattle—and the resistance to WTO deci-sions that compromise member countries’standards of health, safety, and the envi-ronment—are evidence that the WTO isfailing in its role as a negotiating forum. Itslegitimacy is compromised by decisionsthat coerce member countries into relaxingtheir domestic standards to a lowestcommon denominator.

SO WHAT’S TO BE DONE?

The changes that the protesters aredemanding would have significant conse-quences, but may not be achievable. It’snot clear that anyone, even national gov-ernments, could slow globalization if theywanted to. Of the world’s 100 largest eco-nomic entities, more than half are nolonger countries but companies. Whilemany rightly criticize the effects of thistrend, it is folly to deny that financial cap-ital is now instantly transferable aroundthe globe, or that communications tech-nology and the Internet have foreverchanged the way business is done anddecisions are made. It is even questionablewhether the nation-state as such willendure in a world in which the market isbreaking down political and economic bor-ders.

Ironies abound in this situation. The gov-ernments encouraging globalization arethemselves being weakened if not sup-

planted by it, their sovereignty underattack. The protesters decrying globaliza-tion are able to gather and organize onlybecause of the technologies (and in nosmall measure the social sense of globalinterconnectedness) that enable it. Thecorporations that the protesters accuse ofbeing both the drivers of globalization andits primary beneficiaries are themselves atrisk from it: 40 percent of the Fortune 500firms listed in 1985 no longer exist.

The debate over globalization seemsintractable. However, three aspects ofRMI’s work inNatural Capitalismand EconomicRenewal canenlarge the terms ofthe debate, and maymake it less thorny.

AN INADE-QUATE IDE-OLOGY

Much of the failureof the multilateralorganizations togain acceptance and resolve disputes stemsfrom the fact that their underlying ideologyis incomplete.

Like GNP statistics and most ways ofaccounting for economic activity, the ide-ology of globalization ignores the value ofhuman and natural capital. It assumes thatincreasing trade in the two forms of capitalthat are mobile—manufactured and finan-cial capital—will, by itself, increase humanwellbeing. That might be true if the solebasis for prosperity were the exchange ofthose two forms of capital. But ignoringthe critical role of the other two forms ofcapital and engines of wealth creation, andbehaving as if human and natural capitalhad no value, will result only in theincreased impoverishment of almosteveryone. These forms of capital are place-based, being rooted in an environment or a

culture, are therefore not enhanced by thephysical mobility of trade, and may beharmed by it.

However, as our book Natural Capitalismdescribes, companies can begin to behavein ways that enable them to profit and out-compete their rivals even as they reducetheir resource use, eliminate waste, andrestore natural capital. This means that it isnow strongly in the economic interest ofcorporations to begin behaving in waysthat protect the environment. Over thepast decade, many farsighted companies

have already discovered remarkable oppor-tunities through adopting the principles ofNatural Capitalism (see page 6). This hasprofound but previously ignored conse-quences for the debate over globalization.

Together, the four principles of NaturalCapitalism form a business strategy that isboth essential and profitable. The compa-nies that are furthest down the road inadopting it are finding not only astonishingcompetitive advantage and profitability, butalso ways to eliminate (not just reduce)waste and pollution. They can oftenemploy more people, and improve innova-tion and morale.

Such companies are taking a leading rolein addressing some of society’s most pro-found economic and social problems. Theymay not think of themselves as environ-mentalists, only as profit-maximizers. Yet


Like GNP statistics and mostways of accounting for economicactivity, the ideology of global-ization ignores the value ofhuman and natural capital.

SOME BUSINESSES WORRY THAT

implementing NaturalCapitalism will require too

much time and staff energy. However, twoCleveland, Ohio manufacturers have foundthat even small steps can lead to higherresource productivity and greater prof-itability.

Mike Wochna, president of Melin Tool, afamily-owned machine shop with 50employees, began by eliminating solventsfrom his processes—an application of thesecond principle of Natural Capitalism,which aims to close materials loops andeliminate waste and toxicity.

The solvents the company was using hadspecial handling and disposal needs, andpresented air-quality issues on the shopfloor. Wochna collaborated with BetterEngineering Manufacturing of Baltimore todevelop a water-based cleaning system thatwas strong enough to clean off oil residuewithout a chemical solvent.

The new system, which cost $35,000, notonly eliminated the use of solvents, it alsodoubled capacity, reduced labor costs,improved air quality, and reduced noise.

“I didn’t make this investment based oncost savings,” Wochna said. “I wanted toimprove the air quality in my shop. How-ever, because the new cleaning systemruns unattended, I found that I save$55,000 a year in labor costs and couldmove a worker to an opening in anotherpart of the operation.”

A resource-flow analysis of a product,process, or company can help both to elim-inate waste (principle two) and to increaseresource productivity (principle one). Theanalysis can be a simple input/output dia-gram or a more in-depth lifecycle analysisthat considers all the inputs needed to pro-

duce a product and all the outputs createdby the process, including waste (which weprefer to call “unsaleable production”).

After conducting such an analysis this pastsummer, Pete Accorti, co-owner of TalanProducts, a Cleveland-based stamping com-pany with 45 employees and over $9 mil-lion in sales, decided to start by looking ata primary input—energy.

Talan was spending about $12,000 amonth on electricity, but the company hadnot seriously tried to control this cost; itsfocus had been on labor productivity andsales growth.

The first thing Accorti did was create anenergy management committee. The com-mittee contacted Talan’s main vendors,starting with the company that providedand serviced the air compressors used inthe manufacturing process.

“We discovered that it was costing ourcompany $6,000 a month—half of ourelectricity bill—just to run two compres-sors,” Accorti said.

Now Talan is working with the compressorvendor to do a seven-day analysis of airusage and peak demand. Based on the out-come, the company expects to install onehigh-efficiency compressor instead of twoolder ones.

The vendor took the older compressorsback and credited them against the lease ofthe new compressor. Net savings areexpected to be $3,000 per month. Talanmay also contract with an air-servicessupply company to eliminate buying orleasing compressors altogether. This is anexample of principle three, which entailsshifting from selling (or buying) products toleasing services.

What these examples show is that puttingNatural Capitalism into practice need not

take on overwhelming proportions.Dramatic gains toward running an opera-tion with greater resource efficiency can bemade by taking simple and direct actions.What’s more, the cost savings that are usu-ally a byproduct of this more efficientapproach can help companies implementthe fourth principle of NaturalCapitalism—reinvesting in natural capital,which is the basis of future prosperity yetis in increasingly short supply.

Holly Harlan is the manufacturing assis-tance program leader at the WestsideIndustrial Retention and ExpansionNetwork (www.wire-net.org) inCleveland. WIRE-Net’s mission is toretain, grow, and attract industrial andrelated employers and to engage themas stakeholders in the community.

THE FOURPRINCIPLESOF NATURALCAPITALISMNatural Capitalism is a new businessmodel that involves four interrelatedshifts in business practices:

■ Radically increase theproductivity of naturalresources

■ Shift to biologicallyinspired productionmodels

■ Move to a solutions-based business model

■ Reinvest in natural capital

TRUE TALES OF NATURAL CAPITALISM

by Holly Harlan

genes, but is not really about genetics(which is a finely tuned evolutionaryprocess for selecting and transmittingheritable information so as to improvebiological fitness). “Engineering”implies an understanding of howcausal mechanisms translate actioninto effect, but we are far from under-standing how genetic patterns turninto organisms.

But we are well along in changingthose patterns anyhow—and therebytransforming science from a way ofunderstanding how nature works intoa tool for changing what nature is.

Biotechnology not only speeds upgenetic changes by about a billionfold—fartoo fast to ensure safety before release—but also changes their goal from evolu-tionary success to economic profit. Thisindustrialization of life, fundamentallychanging the nature of the 3.8-billion-year-

old life process, is carried out by peopleskilled in gene-splicing technique and bio-chemistry, but generally ignorant of keybiological fundamentals—ecology and evo-lutionary biology. It’s very clever kids withPhDs in “molecular biology,” playing withdangerous stuff they don’t understand.

Some theologians suggest—not from igno-rance or superstition but out of deep bio-logical wisdom—that it was not throughmere carelessness that the Creator failed toput genes from an arctic fish into a straw-berry to boost its cold tolerance. They

page 7

PERSPECTIVES

by Amory B. Lovins with L. Hunter Lovins

IN SCARCELY MORE THAN A HALF-CEN-TURY, our species has developed atleast four technologies that pose a

danger to its own future.

The first, nuclear fission, retains the poten-tial to annihilate humanity. Cold Warterror is now history, but in its place havecome other dangers. Fifty-five years afterHiroshima and Nagasaki, few peopleremember what it means to kindle a smallstar over a city. Vigilance has relaxed,while bomb-making technology and know-how has spread widely in simplified forms.The missing ingredient—fissionable mate-rial—is falling into numerous and irrespon-sible hands. Saddam Hussein nearly madebombs and is still trying; if he doesn’t suc-ceed, someone else will, or will simply buymilitary bombs gone astray.

Having worked for decades on nuclearnonproliferation, I wouldn’t be surprised towake up tomorrow morning and discover

that nuclear terrorism, or even nuclearwar, was under way. There have beennear-misses.

Once made, bomb materials last nearly for-ever. Human institutions and attentiondon’t. Will we go on being lucky—nearlyforever?

DESCARTES MEETSDARWIN

Then there’s the manipulation of genes.The euphemism “genetic engineering” isinaccurate. Genetic manipulation moves

question the belief that biodiversity is soinadequate that we must create novel lifeforms, unneeded for nutrition and unwel-come in the marketplace, to correct God’slamentable oversights.

And like nuclear power, biotechnology canbe abused. High-school kids can buy gene-splicing kits for basement experimentswith recombinant DNA, and find it notunduly difficult to splice deadly toxins intocommon bacteria. Amateurs have alreadybeen caught doing so. Some countries (andperhaps non-national terrorist groups)employ teams of amoral but skilled scien-tists to create dreadful new plagues. That’sso much easier, cheaper, and more conceal-able than developing nuclear bombs. It willbe a pleasant surprise if no designer epi-demics are unleashed on the world, acci-dentally or deliberately.

Genetic manipulation, far from being thepinnacle of industrial modernity, is actuallythe last gasp of industrial primitivism,

WHAT’S POSSIBLEM A Y N O T B E

WISE

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page 8

applying a reductionist and mechanisticmindset to living systems that don’t workthat way. It’s the biggest intellectual colli-sion since the Reformation: Descartesmeets Darwin. Yet it’s astonishingly devoidof compelling social or economic rationale.

Perhaps its most striking feature (just likenuclear power) is the insubstantiality of itsactual benefits. We are assured thatbiotech is the only way to feed the world,just as we were told that nuclear power isthe only way to keep the lights on. Thereality is just the opposite. Both technolo-gies cost more and work worse than well-established alternatives outside thecommercial orthodoxy—alternatives thatare better buys for customers but less prof-itable for input suppliers.

SCIENTIFIC HUBRIS

The potential dangers of two other emer-ging technologies—nanotechnology androbotics—have been eloquently discussedin an article in the April 2000 issue ofWired by Bill Joy, cofounder of Sun Micro-systems and the father of Unix and Java.

Nanotechnology—the technique of makingself-replicating machines on a molecular

scale—offers the promise of “desktop man-ufacturing” that could assemble anything,one atom at a time, very cheaply, with nowaste. Yet, as Joy points out, nanotech canexhibit the same amoral, scientific hubrisas transgenics, and holds the same apoca-lyptic possibilities as nuclear technology. Itcould be used by rogue states or terroriststo create microbe-sized, self-replicatingantipersonnel weapons designed to attackall life within a target geographic area orgenetic group. Worse, a simple but geneti-cally superior lifeform created by nanotech-nology and released without effectivecontrols could conceivably transform allorganic matter on earth into “gray goo.”

There is no need for humanity to take suchrisks. Roughly comparable materials andenergy efficiency is already available,without nanotechnology’s scary downside,from other techniques described in myrecent book with Hunter Lovins and PaulHawken, Natural Capitalism, and in JanineBenyus’s book Biomimicry.

I’m far less qualified than Bill Joy to com-ment on where robotics and artificial intel-ligence are taking us. But as one of theworld’s most capable computer scientists,he deserves to be taken seriously when heasks whether this art, too, may change for

the worse not only what we can do butalso who we are. A robotic device that candesign and build another robotic devicehas already been demonstrated. In the fast-forward world of Moore’s Law andInternet Time (like dog years—they go byabout seven times faster), it may not belong before computers and robots are somuch better that we are at so many thingsthat they start feeling they don’t need us.

DOUBLE-EDGED TOOLS

My purpose in summarizing these con-cerns is not to scorn my colleagues in tech-nological innovation, nor to sow panic, norto gripe about the general goal of progress.As a technologist whose life’s work is inno-vation to create a more secure, prosperous,and life-sustaining world, my questions areabout means, not ends.

My purpose here is rather to invite us allto use our critical faculties and our marketand political responsibilities to create thesort of world we want. When the mostpowerful force we know in the universe—six billion human minds wrapping arounda problem—is harnessed, it should createhappiness and satisfaction rather than suf-fering and injustice.

Our new tools are so sharp, doubled-edged, even deadly, that we need to besure they won’t injure us. If we can’t beconfident about that, then we should laythem down and choose safer ones.

The coming decades will be our species’graduation test, when we discoverwhether this opposable-thumbs-and-large-forebrain experiment was a good idea. Thesearch for intelligent life on earth showspromise, but is now entering its most crit-ical stage. Let’s not mess it up now byblandly assuming that whatever is possibleis also wise.

Amory Lovins co-founded RMI and is itsco-CEO (Research). This article wasadapted from a column distributed bythe Los Angeles Times Syndicate.

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Alcoholic Cars

Dear Rocky,

I have visited Brazil several times in thepast 40 years. Each time I have beenimpressed that their autos were beingfueled by alcohol—the number of alcohol-powered cars has increased dramaticallyand they all seem to be American made.Why can’t we use alcohol until a better“car” is perfected?

—Dr. Morris J. Nicholson, Sun City, Arizona

Dear Dr. Nicholson,

The question of alcohol fuel is a complexone. Alcohol fuels come in two flavors,ethanol and methanol. Either can be com-bined with a small amount of gasoline foruse in normal vehicles, with minor modifi-cations to fuel system and engine tuning.In fact, versions of Dodge’s GrandCaravan, Ford’s Taurus, and Chevy’s S-10pickup are available that run equally wellon either E85 (85 percent ethanol, 15 per-cent gasoline) or straight gasoline. Braziluses ethanol-rich blends, though theirmarket share is declining.

In the United States, most ethanol isderived from corn. As corn grows itabsorbs carbon dioxide from the air, effec-tively sequestering the amount releasedfrom burning ethanol in an internal com-bustion engine. Thus ethanol could be a“climate-neutral” fuel—if the corn is sus-tainably grown.

Unfortunately, in the United States mostcorn is grown using a great deal of fossilfuel—for farm equipment and chemicals—and in ways that deplete topsoil, negatingmuch of the gain from corn’s being arenewable resource. Brazil’s ethanol—fromsugar cane, grown mainly to support jobsin the impoverished northeast—raises sim-ilar issues.

Ethanol can also be produced from agricul-tural waste products, such as switchgrassand corn chaff. However, most ethanol-

producing companies—many of whichhave interests in corn production—havenot developed their plants for these feed-stocks. The economics and net energyyield of ethanol can be favorable with thebest techniques, though they’re not alwaysused. Similarly, most methanol is producedfrom natural gas, although production fromrenewable biomass is possible.

We believe that hydrogen will ultimatelyreplace all other fuels for most vehicles andmany other energy applications. But sincedirect-hydrogen fueling stations are not yetwidespread (though they could be soon),your question about alcohol-fueled vehiclesas an interim step is appropriate.

As long as we’re considering clean interimfuels, though, we must compare alcoholwith another immediately practical choice:compressed natural gas (CNG). Naturalgas—methane—is the simplest hydro-carbon, having only one carbon atom sur-rounded by four hydrogen atoms. Alcoholshave higher carbon/hydrogen ratios thanmethane, and thus emit more carbondioxide when burned.

Also, alcohol-burning internal combustionengines can emit more phenols—a potentialhealth hazard in urban areas—than gasolineengines do. That’s why many urban transitsystems now favor CNG-fueled buses overthose that burn alcohol.

At RMI we believe CNG represents anattractive interim step to hydrogen for thesereasons and also for one other: it’s a gaseous

by JasonDenner, RMIOutreachCoordinator

fuel. The infrastructure needed for trans-porting and dispensing CNG is partly similarto that for hydrogen, so switching to CNGcould help pave the way for hydrogen.

Houseboat Power

Dear Rocky,

I am currently designing a houseboat forpersonal use and am wondering whatmight be the best propulsion system. I amconsidering using a lead-acid battery withphotovoltaic (PV) recharge. I envisionsomething simple like two 120-volt DCmotors for standard propulsion and twobattery banks having ten batteries apiece.Of course an inexpensive fuel cell wouldbe nice! But where would I get hydrogenin the middle of a lake like Powell?

—Robert Y. Jones, Aurora, Colorado

Dear Robert,

RMI hasn’t gotten to the subject of marineapplications of fuel cells, yet. The U.S.Navy has been using fuel cells in sub-marines for some time, though, so the ideais not without precedent.

Interestingly, the middle of Lake Powellcould be one of the best places to gethydrogen. One way to produce hydrogenis through electrolysis: using an electriccurrent to split water into its constituents,hydrogen (H2) and oxygen (O). This couldbe accomplished with PV-supplied elec-tricity.

Because it can be done, of course, doesnot necessarily simplify your task of findingappropriate components with which tobuild your system. If you do decide tocreate the world’s first fuel-cell-poweredhouseboat, you’ll find some usefulresources at our Hypercar Center® web-site (specifically http://www.hypercar-center.org/dox/what_a9a.html).

DEAR ROCKY

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page 10

THE CHALLENGEOf Reducing Greenhouse Gases Down Under

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CLIMATE

AUSTRALIANS, AS WAS EVIDENT

during the summer Olympics,are generally a sunny and opti-

mistic people. But when it comes toreducing the country’s greenhouse-gasemissions, there’s little to smile about,mate.

RMI staffers began working in earnest thissummer on climate issues in Australia.They found that while there’s a high levelof concern about the problem among gov-ernment, community, and environmentalactivists, the reality is that emissions arestill climbing rapidly.

Australia’s greenhouse-gas emissions grewby 16.9 percent from 1990 to 1998—hardly an auspicious start to meeting thecountry’s commitment under the KyotoProtocol to limit its emissions by 2010 tojust 8 percent over the 1990 level.

Does that remind you of something closerto home? It should. The United States issimilarly delinquent in meeting its Kyotopledge to reduce emissions to 7 percentbelow 1990 levels by 2012. The latest fig-ures show U.S. emissions running 9.9 per-cent above.

If those patterns continue, both Australiaand the United States will miss their tar-gets. Their lack of progress to date isexpected to come to light at the SixthConference of the Parties (COP-6) to theKyoto Protocol, to be held November13–24 at The Hague.

Both countries are lagging in part becausethey’re enjoying unprecedented economicbooms. The United States is also sufferingfrom a lack of political will to address theproblem: the Senate has yet to ratify theKyoto Protocol, and President Clinton’sproposed Climate Change TechnologyInitiative has been stalled in Congress.

The folks Down Under face some differenthurdles, including a coal-mining industryresistant to any threat to its livelihood, anda preponderance of older, energy-inefficienthousing. (Hence the importance of modelprojects like the Sydney Olympic Village—see sidebar.)

KING COAL

Although Australia is responsible for only1.4 percent of global greenhouse gas emis-sions, it’s among the highest carbon emit-ters in the world on a per-capita basis.

A major contributing factor is that 80 per-cent of its electricity is coal-fired (naturalgas and hydro account for the rest). Coal isthe country’s main commodity export. Areduction in the amount of coal burneddomestically could hurt the coal-miningindustry, which has been weakened overthe past few years by low global prices,poor profitability, and long-running indus-trial disputes.

“While there are active programs andobvious concerns over climate change inAustralia, there also seems to be anunspoken consensus that anything thatthreatens economic growth or the coal

industry is just a no go,” said senior RMIclimate researcher Rick Heede, who trav-eled to Australia in July with CEO AmoryLovins for a series of energy-related meet-ings and presentations.

Since 1997, Australia has spent A$400million on renewable-energy programs.Another $400 million is earmarked for aGreenhouse Gas Abatement Program. Butemissions keep rising.

“We got the feeling that many Australians,like many Americans, are happy going onthe current course,” said Heede. “There isa lack of understanding, in both countries,about how corporations can profitablyreduce their emissions.”

To that end, RMI is now actively engagedin helping Australian communities andcompanies do just that.

RMI and the city of Newcastle (pop.250,000) are now working together todevelop a plan for the city to meet morethan its share of Australia’s Kyoto commit-ment. RMI signed a memorandum ofunderstanding with the city and theUniversity of Newcastle to work on theproject.

“The city is considering a commitment toreducing emissions by 20 percent from1995 levels,” said Heede. “Newcastle hasa good opportunity to be a model for othercities. It was the most advanced of thecities we visited in regard to reducinggreenhouse gases.”

WHIZZING ROUND OZ

And interest in energy issues is high inNewcastle.

“Amory gave the keynote address at aNewcastle energy town meeting,” saidHeede. “It was amazingly well-attended fora rainy night. Nearly 1,000 people came.There was very strong participation andcommitment in evidence by city officials,the local utilities, and the newly estab-lished Sustainable Energy Technology divi-sion of the country’s main energy R&Dagency.”

Heede and Lovins held more than 30meetings in Australia during their Julyvisit. While most of their agenda wasdevoted to climate issues, they also dis-cussed sustainable tourism with grassrootsactivists in Tasmania, briefed BritishPetroleum on electric-utility andHYPERCARSM developments, consulted withMelbourne University Private on starting agreen business school, discussed HYPERCAR

technology with automakers, and gavenumerous presentations and interviews onNatural Capitalism.

They also met with the environment min-ister and other federal officials in Canberra,state ministers and officials in Queenslandand New South Wales, and municipal offi-cials in a variety of cities, includingMelbourne, where they helped launch thatcity’s Climate Action Plan which seeks toreduce emissions by 10 percent from 1990levels by 2010.

“I feel we were able to give Australiancompanies, communities, and governmentofficials a real sense of the opportunities toreduce their greenhouse-gas emissions,”said Heede. “We were giving activists aspringboard for further action on both cli-mate abatement and corporate sustain-ability.”

—Brent Gardner-Smith

RMI’S GREEN DEVELOPMENT

Services played a role indeveloping the athletes’ vil-

lage of Newington for the Sydney 2000Olympic Games…and beyond.

The project was designed to providehousing for 15,300 athletes during theGames, and then to be reused as an envi-ronmentally responsive new town with4,500 permanent inhabitants. The projectwas privately developed by Mirvac/LendLease, one of the largest developers inthe world.

Of the three neighborhoods, one wasbuilt with temporary structures for theGames, which are now being sold andmoved to other sites in Australia. Theother two neighborhoods are being con-verted from dormitories to completedsingle- and multi-family homes.

Green Development Services founderand lead consultant Bill Browning waspart of the team that won the design-build contest for the village. His role wasessentially that of an in-house bench-marker: he helped the group make surethe concepts it was using for Sydneywere of gold-medal quality.

“I was consistently asked ‘Is this thebest we can do?’ and ‘Who is doingsomething similar?’” said Browning.“In return, I was able to ask ‘Have youthought of this?’”

In addition, Browning helped link theAustralian members of the team withAmerican and European product man-ufacturers.

The team of designers, builders, andconsultants thought of myriad ways to“green” the new village, including:

• cleaning up an abandoned navalmunitions depot at the site;

• locating Newington near the Olympicvenues and along new mass-transit linesto minimize auto dependence;

• creating three pedestrian-focused neigh-borhoods and a commercial center thatwill now connect with surrounding olderneighborhoods;

• installing solar water heaters and grid-connected, one-kilowatt photovoltaicarrays on the roofs of 665 of the homes;

• eliminating the need for air condi-tioning through the use of energy-effi-cient design and passive ventilation;

• undertaking extensive environmentalanalysis and screening of building mate-rial choices; and

• restoring eucalyptus-tree savannas andcreating a channelized stream for theopen-space area.

Thanks to the highly efficient housedesigns and the roof-mounted solarpanels, the neighborhood will actually beable to sell power back to the grid atpeak hours.

“It is one of the more intensive distrib-uted-power experiments going on any-where,” said Browning.

Sydney 2000: A Green Olympic Legacy

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Photo: Mike Hewitt, Olympic Stadium, Sydney

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IT HAS 1.25 BILLION PEOPLE

and an energymix that dependsheavily on coal.Already a major pol-luter, it’s expected by many climate expertsto become the world’s biggest emitter ofgreenhouse gases. Yet it wants to host the2008 Olympics—and to do so under smog-free skies.

Will China change? Can China change?

It’s possible. And signs of swift change areincreasingly evident.

While coal still accounts for a whopping 70percent of China’s energy mix, the countryhas made significant strides recently inreducing consumption: between 1997 and2000, the country’s coal output droppedfrom 1.4 to 0.9 billion tons. That declinehas resulted from a combination ofincreased efficiency and a shift from coal tonatural gas, oil, and renewables.

THE BLUE-SKY FACTOR

The Chinese are embracing alternatives tocoal for several reasons, according to RMI’sAmory Lovins, who with Hunter Lovins par-ticipated in a three-day symposium on envi-ronmental protection in Shanghai in July.

The first is rail capacity. The sheer volumeof coal needed to keep generators gener-ating and boilers boiling is severely ham-pering the country’s ability to move othergoods on its rail infrastructure.

Second, economics: new natural-gas-firedpower plants typically outcompete tradi-tional coal-fired ones, even in a countrywhere coal is plentiful. (The same is true inthe United States.) That gas-fired powerplants are much cheaper and quicker tobuild than coal-fired ones is also a greatadvantage.

A third factor is the growing public-healthemergency caused by chronic air pollutionfrom coal-burning. In that regard, theBeijing authorities learned a lesson last yearwhen the Communist Party decided to cel-ebrate its 50th anniversary with a “bluesky day,” a rare event in the polluted city.So the government shut down pollutingindustries and prohibited the burning ofhigh-sulfur coal.

“They found they rather liked the blue skyand decided to get serious about air pollu-tion,” said Lovins.

Yet a fourth factor motivating China to useless coal is its bid for the 2008 OlympicGames in Beijing. China views the Gamesas a unifying project and knows that itstands a much better chance of winningthem if it cleans up its air.

“They have very little time to show animprovement in clean air and they are

moving rapidly,” said Lovins. “Our Chinesefriends say they have never seen anythinghappening so fast.”

WARTIME URGENCY

In the past year, China has moved with“wartime urgency” to install a natural-gasinfrastructure in five major cities, constructsix 320-megawatt gas-fired power plants inGuangdong Province, and create a nation-wide natural-gas network.

In Beijing, in an effort to promote natural-gas power, the city is preparing a slew ofmeasures to phase out local coal consump-tion. Bejing plans to stop building coal-burning power plants and coal-to-gasgenerators, reduce the use of coal-burningequipment, speed up construction of nat-ural-gas power plants, establish no-coal-useareas, and increase the number of house-holds using natural gas.

The change in energy policy in China thelast two years represents “a sudden genera-tional and bureaucratic revolution,” Lovinssaid, noting that “people who understandgas” have at last started to gain clout com-petitive with that of the coal-favoring tech-nocrats who’ve held sway for decades.According to the U.S. Energy InformationAdministration, natural gas is expected to

A coal-fired power plant looms overShanghai’s harbor. Photo: JeffreyAaronson/Network Aspen

page 12

ENERGY

CHINA:REACHING

FOR GREENGOLD

fast if you accept the rather high officialestimates of China’s GDP growth.

Renewable energy is also catching on. In1993, China had 15 gigawatts (GW) ofrenewable electric-generating capacity,almost all of it small hydroelectric projects.By this year, the planned total is 20 GW;for 2010, it’s 32 GW, including 28 GW ofsmall hydro and 3 GW of wind; and for2020, it’s 49 GW, including 39 GW ofsmall hydro and 8.5 GW of wind. (Thesefigures deliberately exclude large hydroprojects, which typically do more environ-mental harm than good.)

“China is making a large, unheralded con-version toward sustainability by virtue ofits energy policy reversal,” said Lovins.“They deserve a lot of credit.”

PLAYING LEAPFROG

The country, however, is still in an ecolog-ical crisis. As the population gets richer, it’seating higher on the food chain, causingmore land to be committed to growinggrain for livestock to produce meat. Nearly2 million new vehicles take to the roadseach year, and analysts expect that numberto reach 3 million or more by 2010.Factories catering to the growing pur-chasing power of 1.25 billion domesticconsumers—not to mention the ever-bur-geoning export market—add to the air andwater pollution. Forests are being felled,wetlands filled, groundwater mined, andbiodiversity lost at an alarming rate.

“It’s an ecological disaster zone,” Lovins

provide 8–10 percent of China’s energy by2020, up from just 3 percent now.

The move to natural gas offers a significantclimatic improvement over coal. While gasis also a fossil fuel, it contains half as muchcarbon as coal and, in a combined-cyclepower plant, can burn twice as efficiently,yielding a roughly fourfold reduction incarbon-dioxide emissions per unit of elec-tricity output.

During 1997–99, the Chinese economygrew by about 8–9 percent per year, buttotal primary energy use fell by about 4percent, accelerating a trend that cutnational energy intensity in half during the1980s (by the late ’90s, even electric inten-sity was decreasing). Since 1980, Chinahas cut its energy intensity at least as fastas the United States has—nearly twice as

page 13

SHOULD TAIWAN’S MONOPOLISTIC UTILITY, TAIPOWER,complete the island nation’s fourth nuclear powerplant?

A team of four U.S. energy experts, including RMI’s Amoryand Hunter Lovins, this summer recommended abandoningthe project—and the Taiwanese government appears poised tofollow that advice.

The team met in August with Minister of Economic Affairs LinHsin-yi (whose ministry oversees electricity), members of theFourth Nuclear Power Plant Reassessment Committee (whichwas convened by the Ministry of Economic Affairs), thecountry’s top two EPA officials, legislators, technical experts,and journalists. Their trip was sponsored by the W. Alton JonesFoundation.

The Taiwanese government was trying to decide whether tocomplete the $5.4-billion, 2.7-gigawatt plant, which is alreadyone-third built. The team’s advice was to invest instead in effi-cient use of electricity, industrial cogeneration, independentpower production, fuel cells, and renewable energy.

“Taiwan has a lot of other options than completing the plant,”said Amory Lovins, “and they’re all cheaper and more reli-able.”

The team also suggested that Taiwan enhance its policy to openelectricity and natural-gas markets to competition. Indeed, theyfelt that the combination of these two separate initiatives, prop-erly understood and harnessed, would produce a gusher of faster,safer, cheaper, and more secure options.

“Under competitive conditions, you’ll get more electrical servicesthan you need and they would be cheaper than building the restof this nuclear plant,” Amory Lovins told the Taiwanese media ata press conference on August 4.

Fellow team member Ed Smeloff, executive director of the PaceEnergy Center at Pace University and a former board president ofthe Sacramento Municipal Utility District (SMUD), agreed, notingthat 47 nuclear plants already under construction have been can-celed worldwide since 1978. Smeloff also described the closing ofthe operating Rancho Seco nuclear power plant near Sacramento;SMUD’s investments in efficiency and renewables met demand,cut debt and user rates, and created good jobs to boot.

As this newsletter went to press, Economic Affairs Minister Linissued a recommendation to cancel the plant. The legislature mayyet intervene in the final decision, due in November, but theplant’s supporters concede that Lin’s decision may have doomedthe project.

TAIWAN NO MORE NUKES


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presents humankind with a vast range ofnew ethical choices and political puzzles.In this and other ways, we—homo wehope sapiens—are becoming increasinglyresponsible for our own evolution.

Third, computers, serving as prostheticextensions of our brainpower, are replacingmuch of the repetitious drudgery peoplehave always had to endure. They have cer-tainly brought in their train new puzzlesabout the future of “work.” But I can’tbelieve that eliminating drudgery will bebad news for the generations to come.

Fourth, linking faster computers with morereliable telecommunications enables us tomodel and simulate vast systems such asthe global atmosphere, the human

genome—and fallout fromnuclear explosions. This newanalytical power is sensitizingus to the consequences ofwhat we the people are doingto our natural environment—and what we might inadver-tently do to ourselves.

Fifth, the widening spread ofknowledge is creating a “skillrevolution” that provides somany more people with theattributes and ambitions ofleadership as to create a funda-mental change in the tech-nology of organization.

MY SWEEP OF THE HORIZON SHOWS

ten worldwide revolutionstransforming our world. They

are concurrent, but not parallel—rather,they are intermixed, interwoven, interac-tive.

FIVE TECHNOLOGICALREVOLUTIONS

First, the sudden increase in explosivepower has clamped a lid on the scale ofwarfare. That’s a first in human history.The invention of weapons too big to useturned much of big-power military strategyinto an expensive information game.

Second, biotechnology, including the deci-phering of information in living genes,

Administrative pyramids and command-and-control systems are on their way out,consultation and consensus are increas-ingly “in.”

FIVE ASPIRATIONAL REVOLUTIONS

The above five transformations are drivenquite directly by scientific discovery andtechnological innovation. The other fiveare facilitated, even intensified, by scienceand technology. But they are driven by uni-versal aspirations of the human spirit—bya widespread sense of entitlement to“enough” (the fulfillment of basic humanneeds), and beyond that by equally basichuman desires for a sense of achievement,justice, solidarity, and participation.

So, sixth, the idea of human rights foreveryone has become the world’s first trulyuniversal idea-system, the first superstar in

the history of polit-ical philosophy. Ithas come to meanrights not only forwomen, capturedsoldiers, and polit-ical prisoners, butalso for childrenand the aging, forracial and ethnicminorities, forimmigrants and

refugees, and for all manner of people onceconsidered “untouchables.”

Matching universal human rights with uni-versal human responsibilities, however, hasbeen left to be worked out in the 21st cen-tury.

Seventh, a global fairness revolution iswidening as the spread of knowledgeshows the disadvantaged in every societywhat they are missing—and is providingthem with new means of communicationto express their rising resentments andhelp them “overcome.”

Eighth, fierce loyalties to cultural identitywith less-than-global communities—

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LEADERSHIPF O R T H E GLOBAL CENTURY

by Harlan Cleveland

OTHER VOICES

bonded by nationhood, ethnicity, race, reli-gion, ideology, and even occupation—arecolliding everywhere with the homoge-nizing cultures of “modernization.”

Ninth, an emerging ethic of ecology is pro-ducing a revolution in human self-con-trol—based not on “limits to growth” buton limits to thoughtlessness, unfairness,and conflict. The result, in many domains,is actually a “growth of limits.”

Tenth, openness, market incentives, andthe practice of pluralism are currently ondisplay in some of the unlikeliest places.Authoritarian and totalitarian systems aresimply unable to compete with looser sys-tems that “go with the flow” in the globalflood of knowledge.

THE INFORMATION AGE

These global tides and currents are allrelated to each other. Indeed, modern biol-ogists and have joined a long list of spiri-tual prophets, inspired poets, and secularphilosophers in insisting that everything isrelated to everything else—and that, inconsequence, each of us has to try andthink hard about “the situation as awhole.”

The striking thing about these global wind-shifts is the extent to which they all arerooted in the historically sudden spread ofknowledge—which in turn is the conse-quence of upheavals and opportunities cre-ated by the marriage of computers andtelecommunications during the last quarterof the 20th century.

Peering now into the 21st century, wecan’t know just what will happen, orwhen. But we already know somethingmore important: why it will happen.

Information—symbols, not things—will beplaying the lead role in world history thatphysical labor, stone, bronze, land, min-erals, metals, and energy once played.We’ll have to burn into our consciousnesshow very different information is from allits predecessors as civilization’s dominantresource.

Information expands as it’s used—no“limits to growth” here. It is readily trans-portable at close to the speed of light.Information leaks so easily that it’s muchharder to hide and to hoard than tangibleresources were. Information cannot beowned, only its delivery service can.

The spread of information empowers themany, by eroding the influence that onceempowered the few who were “in theknow.” And giving or selling informationdoesn’t give rise to “exchange” transac-tions; these are acts of sharing.

These simple, pregnant propositions aboutthe nature of information, as they sink inaround the world and down the genera-tions, should help us sort out some of thebig conundrums that still puzzle us in thenew millennium.

REDEFINING INTELLEC-TUAL PROPERTY

Let’s take three examples.

First, if information cannot really be“owned,” then the whole idea of “intellec-tual property” is clearly an oxymoron, acontradiction in terms.

It is, of course, quite possible to encourageand reward creativity—it happens all thetime in universities and elsewhere. But it

isn’t necessary to glue future creativity tothe antique notion of personal propertyrights. Rather than digging in now todefend patent and copyright law, thosecrumbling ramparts of information-as-prop-erty, we will be wise, early in the 21st cen-tury, to invent, elaborate, and project amore viable concept that leaves plenty ofroom for incentives for creativity, yetdoesn’t rest on “ownership of information”as its moral, legal, economic, and philo-sophical basis.

Moreover, the footings on which “tradesecrecy” and government classification sys-tems rest are just as vulnerable as patentand copyright law to the predictable torna-does of change. They also deserve a skep-tical new look early in the Global Century.

DWINDLING DISTANCES

A second example starts with the dwin-dling relevance of distance, which widensthe definition of “community.”

Down through history community hasmostly meant the ties among people wholived or worked nearby. Community cannow, much more readily, mean peoplewith similar interests and motivationsworking together in “virtual teams” wher-ever they are living, working—or eventraveling.

It is still premature, but it’s no longerlaughable, to speak of “the end of geog-raphy.” Much of my life has been focusedon international affairs, and I would haveto be blind not to have noticed that geo-graphically “regional” bodies have turnedout to be the least effective and mostunderemployed of the many kinds of inter-national organizations invented during thepast 55 years.

The European Union may yet prove to bean exception to this broad-brush general-ization; but even “Europe” hasn’t yet cometogether enough to project its valuesworldwide in the 21st century.


The striking thingabout these wind-shifts is the extentto which they areall rooted in thehistorically suddenspread of knowl-edge.

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page 16

HOT SEAT

Stephen B. Andrews:

On page 2 [in an article on globalwarming, you state:] “Coal is alreadydefunct or on the way out in most of theworld. Its use is now falling even in theUnited States, China, Russia, and Easternand Western Europe.”

Then how do you square your statementwith [June 1999 figures showing thatworld] consumption is stable over theperiod 1988–98?… While your other fig-ures are correct, consumption is up inJapan, India, South Korea, and SouthAfrica, hence the leveling. How can youcall this “defunct” or “on the way out inmost of the world”?

Amory Lovins:

You were right up to 1998. We’re rightstarting in 1998. Chris Flavin [of theWorldwatch Institute] wrote…on 15March 2000 that “…the good news inworld energy markets the past two years isalmost entirely in the coal sector.

“For the first time, we can say that worldcoal demand is on an unambiguous down-ward track—in Eastern and WesternEurope, Russia, China, and even (finally)North America.

“These declines have been so sharp in1998 and 1999 that Worldwatch is nowestimating that global carbon emissionshave fallen for two consecutive years. As aresult, carbon emissions in 1999 wereactually slightly below the 1996 level. Thelast time the world had this much ‘goodnews’ on the carbon front was during thelast oil crisis 20 years ago.…”

China, by the way, officially projects a2000 coal burn that’s back to the 1986level!

Andrews:

On page 25 [you state that:] “...Americandependence on imported oil [is] now backto early 1970s levels.” [Here Andrewscites official figures showing that U.S.petroleum imports went from 6,025 to9,612 million barrels per day during1973–99.]

Hello!? What’s wrong with the above pic-ture? Imports are up 60 percent!! Moreimportantly, imports are up 3.5 mb/day. Idon’t think the Saudis give a rip what the“percentages” of imports are at this point.They sell millions of barrels of oil, not per-centages of barrels of oil. In the year2010, are we more likely to have a con-flict with the Chinese over millions of bar-rels of oil which they AND we want toimport, or over the percentages which wewant to import?

Lovins:

What matters to “dependence” is not theabsolute level of crude imports…but netimports as a share of products supplied.

This share is graphed for 1973-99 atwww.eia.doe.gov/pub/energy.overview/monthly.energy/graph/mer1_7.pdf. You’reright that the statement could have beenclearer if RMI Solutions had publishedmore information. But the graph showsthat the relevant fraction was 49.6 percentin 1999, very similar to, but having sur-passed, the 46.5 percent in 1977 (the pre-vious peak).

I take [the article writer’s] statement tomean, correctly, that import dependence,conventionally measured in share of con-sumption, has already regained and passedits earlier crisis-period levels. He’s right. Ibelieve what matters to dependence and toits domestic perception is share of con-sumption. You’re correct that exportersmay have a different perspective, but thatwasn’t [the writer’s] point. The scope forinternational conflicts depends on (amongother things) still a third perspective—market flexibility and share.

Andrews:

Lastly, apart from errors, I want to con-tinue challenging the RMI company lineon the world’s future oil consumption....Please consider these facts, then respondto the question below if you have amoment:

A. There are some 700,000,000 mostlyinefficient gasoline and diesel vehicles inthe world today-—inefficient, at least,compared to both hybrids and your petfuel-cell-powered vehicles. While cars inthe U.S. last an average of 16 years, thosevery same vehicles are often spirited outof the country to be maintained for manymore years. While no reliable figure isavailable, an estimated life expectancy of20-plus years for the world mechanizedfleet is probably not unrealistic.

B. There are some six billion people in theworld (a few handfuls more than when“...Stone Age man ran out of stones....”).

C. The appetite for cars worldwide ispowerful; fortunately, economics in thedeveloping world limit the purchasingpower there to some degree.

D. The appetite for gas-guzzling SUVs ismind-numbing in this country. Light-truck-category sales are over 50 percent.

We received several challenging questions to facts and fig-ures given in the last newsletter.The following point-coun-terpoint between a critical reader and Amory Lovins wasparticularly interesting.The exchange occurred via e-mail.

E. The unwillingness of the U.S. drivingpublic to tolerate rises in gasoline prices,from either taxes or short-term supplyissues, is almost frightening. As per 1996,politicians are pandering to see what theycan do to “ease the driving public’s pain”until supply/demand [makes] the gasolineprice issue fade away….

F. Two of the world’s three largest oil pro-ducers (the U.S. and the former SovietUnion) reached their peaks in oil produc-tion a while back (1970 and 1988, respec-tively).

G. World oil discoveries peaked during1962 (USGS figures). Today, we discoverone new barrel of oil for every four barrelswe produce.

H. Several oil industry retirees and currentoil company officials have attested to thefact that world oil production will peak,hit a high point in daily production andthen slowly decline, between 2005 and2010. (Shell is more optimistic, using per-haps 2025 or 2030; BP has previouslyacknowledged 2010 or so.)

Lovins:

About right until G; remember that there’sno point spending money now to prove upreserves when you have ample ones toextract within your E&P [exploration andproduction] time horizon to meet yourdemand and market-share expectations. Hdepends on tacit assumptions aboutdemand growth; you need to consider notonly geological and economic/technolog-ical supply but also efficiency and substitu-tion if you’re to have any insight intofuture supply/demand balance. This isprobably where we most differ.

Andrews:

Given the above, I have a serious questionfor the RMI Hypercar Brain Trust: Howmany hybrids and fuel-cell vehicles do youanticipate in 2010? (Round numbers ofmillions will do)….

Lovins:

Collectively these could well have amarket share around half—more like two-thirds if one is optimistic.… You can runthe [fleet] numbers yourself. Just rememberthat improvement in the marginal vehicles’fuel economy by then should be roughlyfour to eight times [that of] the same-classnew vehicles today, because platformphysics, not just driveline, will beimproving markedly; that a rapidlyincreasing fraction of the fuel burned willnot be petroleum-based (initially mainlynatural gas reformed to hydrogen, firstdownstream and later at the wellhead, andlater mainly renewable electricity); andthat accelerated-scrappage policies tohasten the stock turnover will be veryattractive. All three of these effects mul-tiply.

Andrews:

Given the above facts…unless you foreseea very high level of efficient vehiclesflooding the market virtually overnightand worldwide—at nearly 100 percent ofannual production by 2010—I questionhow you can make the statement “That’swhy oil prices and shortages are ulti-mately beside the point.” I hope you areright because if you aren’t, then in myopinion the above is a very irresponsiblestatement, leading one to believe that allby itself “evolution will take care of every-thing” in a timely “technology über alles”fashion, without any economic hardship,let alone social upheaval.

Lovins:

I’ve been assessing detailed options for effi-ciency and substitution in this industry fornearly 30 years. For what it’s worth, totalU.S. primary energy consumption is nowwithin 2 percent of the “soft energy path”I published in Foreign Affairs in 1976.That’s not entirely coincidental.

CLARIFICATION

In “Return of the Nuclear Salesmen”(RMI Solutions, Spring 2000), we statedthat 95 percent of all new U.S. energy“supply” during 1996–98 came fromefficiency improvements.

This statement was based on an analysisof the economy’s “energy intensity”—the amount of energy required per dollarof GDP. The economy grew faster thanenergy consumption during 1996–98, soenergy intensity declined. Had energyintensity remained constant at 1996levels, we calculate that the increase inenergy consumption would have been20 times greater than it actually was in1998. Thus energy use increased by only5 percent (1/20th) of the amount bywhich it would have otherwise risen.

We attributed the other 95 percent toenergy efficiency. However, some of thisreduction is arguably due to structuralchanges in the economy, such as theincreasing proportion of GDP due toinformation techology industries.

Andrews:

…And please don’t tell me that we’regoing to elect Al Gore plus a Congressthat will favor his enviro strategies, whichwill give us the leadership to move Detroitalong faster and make the country wakeup to the climate change problem. I sawhow effective Clinton was in 1993 whenhe tried to pass the BTU tax.… I saw how[Energy Secretary Bill] Richardson woreholes in his knees trying to get OPEC toopen the oil spigot well in advance of [thisyear’s] elections.

Lovins:

I think you’re unnecessarily fixated on thenecessity to change federal policy. Ourstrategy is to make policy irrelevant to thetransformation of the car industry, becauseit’s just as random a variable as world oilprice, and we don’t want success todepend on a random variable.

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RMI NEWS

NaturalCapitalismGoes Global Natural Capitalism: CreatingThe Next Industrial Revolution continuesto be sought after by readers around theworld.

The hardcover edition is now in its sixthprinting (with 42,500 copies sold at lastcount), and the softcover edition wasreleased in October. Both are published byLittle, Brown in North America.

The book is also doing well in the UK(where it’s published by Earthscan),Germany (Riemann/Bertelsmann), andBrazil (Cultrix).

In China, the simplified-characters Chineseedition by Shanghai Popular Science Presssold out on the second day of availability.The mayor of Shanghai read it on the firstnight of publication and the next dayordered 700 copies for all his top officialsto read.

Chinese publishers are now reviewing pro-posals for a complex-character edition,

which will better reach the primary busi-ness audience in China.

The book is due out in Japanese in lateNovember from Nihon Keizai Shimbun, isbeing translated into Russian by theRussian Academy of Sciences, and is beingtranslated by commercial publishers intoDanish, Italian, Korean, and Estonian.

On toGreenerPasturesWhen RMItes move on to greener pas-tures, it’s a good thing.

That’s what RMI alum Auden Schendlerhas done, and he’s gone from strength tostrength. A former RMI research associateand newsletter editor, Auden left lastspring to become theAspen SkiingCompany’s environ-mental affairs man-ager. This September,he was named thecompany’s directorof environmentalaffairs.

“What I learned at RMI was absolutelycritical to what I’m doing here, and I usemany of the same principles and ideas,”Schendler said. “In fact, I’ve described mydepartment as a small version of RMI builtinto the corporation.”

The Aspen Skiing Company has been rec-ognized in the ski industry for its environ-mental programs. It is a two-time winner,in 1998 and 1999, of the Times MirrorGolden Eagle Award for OverallEnvironmental Excellence in the skiindustry.

The company’s environmental programincludes a nonprofit, employee-funded andemployee-directed EnvironmentFoundation, which awards funds to localenvironmental organizations. It was alsoone of the first ski-resort operators tocreate a full-time environmental directorposition.

Adopt aGoat—Yes, a Goat

Last summer 600 cashmere goatsspent nine days happily munching onCanada thistle and houndstongue—nox-ious weeds served up compliments of RMIon the 1,000-acre Windstar LandConservancy property in Old Snowmass,Colorado, home to RMI’s research center.

The goats, brought in from Wyoming, eat90 percent weeds and 10 percent grass,leaving more food for wildlife and allowingthe native grasses once again to dominatethe pasture. Goats naturally prefer weedssuch as thistle and houndstongue, whichare invading pastures across the West, andthey have voracious appetites.

The only down side to using the “tran-sient” goats at RMI was the timing of thegrazing.

“Nature dictates when the plant bloomsand with the drought that we had this yeareverything was a month later than weexpected,” said RMI land manager PaulBuch. “The goats had to be scheduledmonths in advance and the timing of thegrazing was not optimal. With our ownsmall herd on site we could hit each areaas it blooms and then repeat the grazingagain during the summer.”

And so, with that realization, Buch haslaunched an adopt-a-goat program so that

Natural Capitalism is now available in softcover.

RMI can have its own herd to help managethe land.

“We need 50 to 100 goats,” said Buch.“The program will be set up so that $100‘buys’ you a happy and productive goathere on our property. It costs $50 for us tobuy a goat and then another $50 onaverage to cover transportation and veteri-nary costs.”

Cashmere goats have proven to be effec-tive weed-eaters. They’re smart, easy tohandle with a trained dog, and look greatin sweaters of their own making. The goats

will be deployed on different portions ofthe land where weeds are a problem,including wetlands and steep areas whereaccess is difficult. In the winter, the herdwill be contracted out to properties inwarmer regions.

So don’t delay. Contact Paul Buch [email protected] to begin the adoption pro-cedure for your very own cashmere RMIgoat.

RMI For KidsThe newest addition to the RMI web-site, RMI for Kids, is going live this fall.This is the Institute’s first non-local pro-gram to bring its unique approach toresource efficiency and whole-systemsthinking to younger audiences.

A startup grant from the Nathan OhrbachFoundation has enabled us to create a rudi-mentary RMI for Kids section consisting ofenergy information and links for kids andteachers. To reach it, visit www.rmi.organd click on the “RMI for Kids” button onthe left.

Further funding is needed to realize ourextensive long-term plans for the program.We hope to grow it to include informationon all of RMI’s activity areas, including“Natural Capitalism for Kids.”

The idea for RMI for Kids grew out of themany requests for information about ourwork that we’ve received in recent yearsfrom children, mostly fourth through sixthgraders. Outreach coordinator JennyConstable realized that none of our mate-rials were designed to speak to anyoneyounger than high school students.

If you have any content suggestions forRMI for Kids, or any ideas on obtainingfurther funding for it, please contact JennyConstable at [email protected].

NewChallengeGrant RMI is pleased to announce that theSandler Family Supporting Foundation hasmade a challenge grant to RMI of$100,000, provided that RMI raisesanother $200,000 from new individual,foundation, or corporate donors who give$10,000 or more by December 31, 2000.

“This challenge is a great way for aprospective donor to get additionalleverage for their gift,” said RMI Directorof Development Dale Levy.

“We’ve already had several people andfoundations respond to this challenge, andhave secured nearly $100,000 toward thegoal,” he added.

Stock Gifts:Least-CostGivingA growing number of RMI supportersare discovering the benefits of donatingstock.

By giving appreciated securities to RMI,you are entitled to a federal income taxdeduction based on the current fair marketvalue of the security. You will also avoidpaying capital-gains tax on any increase inthe value of the stock given. That’s twoways to save, potentially enabling you tomake your usual gift at lower cost, or tomake a larger gift at no increased after-taxcost.

This program isn’t just for the well-endowed. RMI has received stock giftsranging from $150 to more than $30,000.And just in case you were wondering, RMIimmediately liquidates donated stock—we’re not in the business of speculating onthe stock market—and doesn’t have to paytax on the cash raised from its sale.

Think of your gift to Rocky MountainInstitute as another savvy investmentopportunity—an investment in natural cap-ital, which yields dividends on a globalscale.

If you have questions about giving appreci-ated securities to RMI, please contactDevelopment Director Dale Levy orComptroller Christy Hamrick at 970-927-3851.

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BenShepherd,Intern, GreenDevelopmentServices

Todd Buchholz’snewly revised book,

New Ideas From DeadEconomists (Plume, 1999), explores “clas-sical” economics and its application totoday’s world.

Buchholz lightens the load of the dismal sci-ence with commentary and humorousasides on traditional economic theory andeven on the lives of the economists them-selves. For instance, did you know thatAdam Smith never taught (or even took) aneconomics course?

Re-examining the dead economists’ ideas inlight of current events, Buchholz asks ques-tions like: Would Karl Marx have to revisehis theories in light of the fall of the SovietUnion? What would Thomas Malthus sayabout the current state of immigration?What would they all think of the rise of aglobal economy? Good questions. Goodreading.

Tom Feiler,ManagingDirector, RMI

The central theme ofEnrico Cohen’s TheArt of Genes: HowOrganisms Make

Themselves (OxfordUniversity Press, 1999) is that metaphorsmatter—that the way we picture thingsshapes our understanding of concepts.Cohen argues that the mental models thatcurrently guide the science of biogeneticsare misleading.

He starts with a critique of traditionalmetaphors for developmental biology andgenetics: namely manufacturing and com-puters. The problem with the manufac-turing metaphor is that goods are made byhumans or machines—that is, the making isdone by an outside agent—whereas organ-isms make themselves. Likewise, develop-mental processes are fundamentally unlikethe way a computer works because thecomputer’s hardware is separate from, andexternal to, the program’s execution,whereas the organism builds itself as it pro-gresses through its stages of development.

Cohen’s metaphor of artistic and serendipi-tous creativity challenges the conventionalnotion of genes as the “master control”mechanism, and presents a view in whichgenes have a more modest role within asystem of other cellular components andwithin the context of the whole organism.

Kate Parrot,ResearchAssociate,EconomicRenewal

I kept pushing PeterSenge’s The Fifth

Discipline: The Art & Practice of theLearning Organization (Doubleday, 1990)around on my plate of bedside readingmaterial like a child working dinnertimepeas.

When I finally did pick it up, I wasenthralled. This book teaches about learningin the experience of an individual, a group,an organization, or a nation.

Senge writes engagingly about how systemscause their own behavior. He also enumer-ates the five disciplines of the “learningorganization”: personal mastery and

growth; working with mental models;building shared vision; team learning; andsystems thinking (the last, Fifth Discipline,being the one that integrates the others).His compelling and beautifully articulatedexamples breathe life and bring context toabstract concepts.

Dhara Vala,Intern,NaturalCapitalismPractice

Upsizing: The Roadto Zero Emissions—

More Jobs, MoreIncome and No Pollution, by Gunter Pauli(Greenleaf, 1998), is a small book with aprofound assertion: “Every politician andcorporate executive should know that it ispossible to improve the productivity of anenterprise, while generating more jobs anddramatically reducing pollution.”

Pauli shows how “byproducts” and “waste”can be used in ways that are more profitablethan the primary products of an operation.Considering tropical fruit plantations, forexample, he notes that most waste hugevolumes of biomass. But by applying tech-niques to close the loops, such as biore-fining ethanol and extracting valuablechemicals, the value of the “waste”increases dramatically, and can help trans-form local economies.

The book’s value lies in its in-depth casestudies, ranging from a brewery in Fiji thatuses wastes to help grow mushrooms to aSwedish island dedicated to the principlesof “zero emissions.”

This is not light reading, but Pauli offers upboth hope and pragmatic solutions forredressing the sad fact that “humankind isthe only species on the planet capable ofgenerating waste no one wants.”

WHAT ARE YOUREADING?

on their résumés. In return, RMI getsmuch-needed assistance and benefits fromthe interns’ fresh perspectives on theworld.

Well, the summer of 2000 was one forthe record books—we had a bumper cropof 13 interns! The decision was made toincrease the number of internships partlybecause we had so many projects weneeded help with, and partly because wehad hundreds of applicants to choosefrom. The selection process wasn’t easy;we had some extremely qualified andexperienced applicants. I think we didwell to whittle them down to just 13.

The camaraderie among the group thissummer was strong, aided by hiking andcamping trips in the surrounding moun-tains, and volleyball in the meadow infront of our building. The interns alsocame up with a unique way to introducethemselves: each one wrote a bio of him-or herself, and each bio was supposed to

RMI HAS ALWAYS WELCOMED

an intern or two, or a few at atime, particularly in the

summer. College students who’ve heardRMI staff speak, or who’ve read our publi-cations or learned about the Institutethrough a professor, are often anxious tocome and be a part of RMI. They learn alot and the experience serves them well

INTERN INVASION

by MartyPickett,ExecutiveDirector

LIFE AT RMI

contain one lie. Spot the lies, they said,and we’ll cook you all a gourmet dinner.It was hard to find the fibs, as so many ofthe interns had already done so much intheir careers.

Our summer interns brought freshinsights and challenging questions. Theyresearched globalization issues, rethoughtthe approach we’ve taken on getting busi-nesses and communities to work together,helped develop a “toolkit” that companiescan use to put the principles of NaturalCapitalism to work, and researched casestudies in green development, distributedelectricity, and other RMI-related disci-plines.

The internship program offers yet anotheradvantage to RMI—we get a good look atpotential employee candidates! This year,the crop yield was high. We hired four ofthe interns to stay on staff. The othershave gone back to school or the market-place, brimming with fresh ideas, newlygained knowledge, and, hopefully, fondmemories of a summer at RMI. But we

expect to see them again—as leaders intheir fields, or as corporate executives,perhaps, making decisions that will ben-efit both their firms and the world inwhich they do business.

***

As this year’s Konheim Fellow, C.C. Gillcontinued a long and honorable traditionhere at RMI. The Konheim Fellowship,which supports an annual internship withGreen Development Services, was estab-lished by Bud and Carolyn Konheim inmemory of their son Eric, who died in a1991 sea kayaking accident.

Another family is currently raising moneyto endow a summer internship inmemory of their late son, whose “dream”had been to work at RMI. Similarly, thefamilies and friends of longtime RMI sup-porter Margaret Frantz and RMI’s lateland manager David Tice make donationsto “sponsor” interns.

These internships are fitting, living memo-rials to individuals who supported theInstitute’s work and ideas.

Top Row: Chad Laurent, Kate Parrot, Amanda Ayres, Ben Shepherd.Bottom Row: Adam Berman, CC Gil, David Payne, Alice Hartley.

Not Pictured: Holly Harlan,Dhara Vala,Ken Wicker,Lewis Cassidy,David Kaplan.

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page 22

Myth #3: High tempera-tures are to blame

Temperatures this summer were high, buthardly extraordinary.

Utility executives are well aware of thesimple relationship between hot summerweather and increased air-conditioner use,the largest driver of summer electricitydemand. But inadequate planning by utili-ties and their government regulators torespond effectively to rising electricity usehas exacerbated the problem and pre-cluded more proactive and cost-effectiveresponses.

For instance, investments in energy effi-ciency by California utilities in the early1990s reduced statewide electricity needsby 10,000 megawatts (MW) compared towhat they would have been, and deliveredtens of billions of dollars of economic bene-fits to Californians. If these cost-effectiveprograms had been continued, the statewould have sailed through this pastsummer without a supply problem. And ifneighboring states had captured their effi-ciency opportunities too, they wouldn’thave depleted the regional power pool’sreserves, thus causing the price volatility towhich California, as the pool’s biggest netimporter, was most exposed.

Myth #4: New power plantconstruction has stalledbecause of restructuring

Power plant construction in California andthe interconnected western power grid hasbeen continuing at a brisk pace despiteelectric industry restructuring. During the1990s, California added 6,048 MW ofsupply—roughly the equivalent of six largenuclear power plants. These “invisible”additions are what’s been keeping thelights on.

But the reason for the perception thatsupply expansion has stalled is thatCalifornia utilities aren’t building large,high-profile power plants. Indeed, in thelast decade about three-quarters ofCalifornia’s new plants were built by non-utility generation companies—a new breedof entrepreneurs that compete in thepower markets with the traditionalmonopoly utilities. The average size oftheir plants is just 20 MW, compared to300-500 MW for typical utility coal-firedplants and 1,000 MW for nuclear plants.In contrast with large, centralized utilityplants, the small plants are distributedthroughout the grid, thus boosting the reli-ability of the entire system. In addition,because most use cleaner-burning naturalgas or renewable energy sources, they sig-nificantly reduce the air and water pollu-tion associated with electricity production.And once built, the renewable sources lockin a fixed price because they use no fuel.

Myth #5: More powerplants are the answer

Large, centralized power plants might bepart of the short-term solution, but arelikely to be poor investments in light of therapid technological transformation takingplace in the industry. Decentralized waysto make, save, and store electricity—microturbines, fuel cells, renewables—arerapidly shifting the electricity industrytoward small-scale generating systems, dis-persed siting, and high-efficiency end use.

The magnitude of the transformation ofscale currently envisioned by manyindustry leaders and made possible by newtechnologies is hard to overstate. Suchchanges will save customers tens of billionsof dollars in annual electricity costs, signifi-cantly reduce pollution, and usher intremendous business opportunities forcompanies at the forefront.

WHERE DO WE GO FROM HERE?

If lawmakers, regulators, and consumersare looking for someone to blame forCalifornia’s power shortages, the mostobvious place to start is the combination oflaws and regulations that have latelystalled California’s cost-effective invest-ments in using electricity more efficiently,and that have resumed the old, bad systemof rewarding utilities for selling more elec-tricity rather than cutting customers’ bills.Optimalindustryrestructuringwould reward the best buys most and theworst buys least. The best buys—efficientuse, then distributed generation—areplenty big to do the job.

Happily, the six bills signed into law inSeptember by Governor Davis renew thesehistoric priorities. Supported by a broadindustry-utility-labor-environmental coali-tion mobilized by the Natural ResourcesDefense Council and its friends, the pio-neering legislative package adds, amongmany other benefits, over $5 billion forefficiency and clean-energy investmentsduring 2002–12.

The solution to California’s electricitysupply problems cannot be found either insimple-minded, muscle-bound approaches,or in government control of supply anddemand in the marketplace. They lie in theproper application of market principles thatreward economic efficiency and innova-tion, while disposing of old, inefficient, andmisguided notions about markets and con-sumer behavior. In the meantime, we needto resist the temptation to latch onto quickfixes that are out of step with marketdynamics, today’s technology, and con-sumer needs.

Thomas Feiler is the managing directorof RMI’s Natural Capitalism Practiceand a leading authority on the electricpower industry.

e n e r g y

c o n t i n u e d f r o m p a g e 2

CALFORNIA ENERGY MYTHS

It was in the nature of things that the fewhad access to key resources and the manydid not: there never seemed to be enoughto go around. The inherent characteristicsof physical resources made possible—per-haps even necessary—the development ofhierarchies of power based on control (ofnew weapons, transport, trade, markets,and even of knowledge back when secretswere sometimes secure), hierarchies ofinfluence based on secrecy, hierarchies ofclass based on ownership, hierarchies ofprivilege based on early access to particularpieces of land or especially valuableresources, and hierarchies of politics basedon geography.

Each of these five bases for hierarchy anddiscrimination has been crumbling in thewaning years of the 20th century. The oldmeans of control are of dwindling efficacy.Secrets are harder and harder to keep (asthe CIA and the White House seem torelearn every month or two). And owner-ship, early arrival, and geography are ofdeclining importance in accessing, remem-bering, analyzing, and using the knowl-edge and wisdom that are the reallyvaluable legal tender of our time.

The twilight of hierarchy opens up a fast-growing need for people who can and willtake the lead—and requires very differentattitudes and strategies for those who optto point the way.

Harlan Cleveland is President Emeritusof the World Academy of Art andScience. He has served as a MarshallPlan executive, a magazine editor andpublisher, Assistant Secretary of State,U.S. Ambassador to NATO, and a uni-versity president. This article wasadapted from a speech delivered to theConference on Applied Brilliance inDana Point, California on June 9, 2000.

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With electronics, satellites, and fast com-puters at our command, we have allwatched the dwindling relevance of dis-tance in our intellectual pursuits. Butwe’ve also noticed that delivering facts andideas—which can be done so efficientlyfrom a distance—is only half of teaching-learning dynamics. The other half is “get-ting to know you, getting to know allabout you”—the magical, social, humanpart of education.

Computer-assisted communication is not asubstitute for face-to-face contact. But theconverse is equally true. Once I get toknow you pretty well, up close and per-sonal, I really don’t need to see your faceevery time we talk on the phone orexchange messages by email.

What’s clear is that combining up-closeand distance learning enhances the educa-tional experience, beyond what’s possiblewith either mode alone.

TWILIGHT OF HIERARCHY

A third example of the impact of theinformatization of society is the changingseismology of organization and leadership.

The direction of change is now more thanobvious: everywhere, a shift from top-down “vertical” relationships toward “hori-zontal,” consensual, collaborative modes ofbringing people together to make some-thing different happen.

This major historical fault-line is also, veryclearly, a consequence of the spread ofinformation—symbols, not things—as thenewly dominant resource. The morepeople are “in the know,” empowered byready access to the enormous pool ofknowledge available through the Internetand global media, the more likely they areto think they have something relevant tosay—and insist on being heard.

c o n t i n u e d f r o m p a g e 1 5

said. “However, they are mobilizing tostart creating system solutions byaddressing root causes.”

One sign of a growing environmentalawareness is that Chinese newspapers aredevoting more space to environmentalproblems. Another is that China has beenshutting down polluting small coal mines,cement works, oil refineries, steel factories,and thermal power plants, despiteincreasing demand for such products in thecountry.

In light of all this, RMI has an opportunityto make a difference in China, and thispast summer four staff members carriedout exploratory work there. While theLovinses participated as “internationallyrespected scholars” in the Shanghai sympo-sium, Alexis Karolides presented a work-shop on Natural Capitalism and greendevelopment in the northeastern city ofTianjin, and Huston Eubank served as thegreen-development representative on ateam of American planners helpingdevelop a model rural sustainable village incentral China.

Amory Lovins returned with a sense thatRMI will become increasingly active inChina. RMI’s work is considered transideo-logical, welcomed equally by the rulingCommunist Party and the burgeoning capi-talist (“market socialist”) sector.

“We’re not viewed as a political trouble-maker, we’re offering them solutions toproblems,” he noted. “They are above allpragmatic. They want to know whatworks, and they want to implement itquickly. They are playing not just catch-upbut leapfrog.”


c o n t i n u e d f r o m p a g e 1 3

CHINA LEADERSHIP

THE ROLE OF THE PRIVATE SECTOR

The second major gap in the currentdebate over globalization is that neitherthe protesters nor the parties to the globalinstitutions are paying any attention to thepositive, problem-solving role corporationscan play.

The protesters believe that the corporatesector is the problem, not the solution, andmust be regulated by government intobehavior that does not destroy the environ-ment. This prejudice is a hallmark of theefforts to counter the negative effects ofglobalization. It also limits the possibility ofdialogue, and leads many businesspeopleto suppose that the environment is a fringeactivity of enthusiasts who want to regu-late their activities and drive up their costs.This erroneous view is reinforced by a cer-tain type of economic theorist (or environ-mental activist) who thinks that

environmental protectionmust be costly and

painful, on the theorythat if it were easy itwould already havebeen done by now.

If, however, it istrue that adherence

to the principles ofNatural Capitalism will

be the basis of profitabilityin the coming decades, then it is in busi-nesses’ own interest not to deplete theirnatural or human capital. Global corporatepower has some serious downsides, nodoubt, but the best leaders of the transfor-mative corporate sector are inviting debateover what their role should be and howto make their companies restorative ofhuman and natural capital. They arerealizing that corporations that do notsteward and reinvest in their mostvaluable resources will face a grimfuture.

those that practice Natural Capitalism arein the vanguard of environmental restora-tion, because they are be behaving as ifnatural capital were properly valued. Someare even restoring human community andculture as well by similarly respecting andreinvesting in human capital.

It will be interesting to observe the reac-tion of the opponents of globalization tosuch companies. At present, protesterschallenge the right of businesses to amassundemocratic power, and are questioninggenerically the legitimacy of any large com-pany. If the Natural Capitalist thesis is cor-rect, however, we are in the early stages ofa new industrial revolution in which com-petitive advantage will flow to those com-panies that behave responsibly, not justbecause they gain legitimacy andbrand equity, but because of thefundamental superiority of abusiness model based onradically higher resourceproductivity, closedloop and non-toxic pro-duction, the “SolutionsEconomy,” and rein-vestment in natural cap-ital.

Investors and consumersare beginning to scrutinizecompanies from this perspec-tive, and to reward the trans-formational ones that are, in thetrue spirit of capitalism, produc-tively using and reinvesting in allfour forms of capital. Those thatpractice the old industrial model—recognizing only financial and physicalcapital while ignoring natural andhuman capital—will suffer and may fail.

c o n t i n u e d f r o m p a g e 5

It may well turn out that the institutionswith the greatest interest in promotingenvironmental or labor agendas are thevery companies that the demonstrators arevilifying. If Natural Capitalism drives a re-evaluation of business as we know it, thenthe current conflict over trade, labor, andthe environment may become moot, as theeconomic interests of the corporationsbegin to converge with the values of citi-zens. Already a growing number of busi-nesses are declaring a commitment tooperate sustainably—because it’s the rightthing to do, or will buy them goodwill, orbring competitive advantage and profit, orsome combination of these reasons.

In a perfect world, all corporate executiveswould follow the lead of Ray Anderson ofInterface, Pasquale Pistorio ofSTMicroelectronics, and Mark Moody-Stuart of Royal Dutch/Shell. These leadersare redefining their responsibilities toextend far beyond enhancing shareholdervalue and the next quarter’s profits, toembrace stewardship for the world. Suchcompanies are embodying, clarifying, andextending the principles of NaturalCapitalism as the new basis of profitabilityin the decades to come.

Until all companies follow their lead, how-ever, citizens will demand that “govern-ment” institutions ensure a level playingfield, with fair market mechanisms andbasic protections of human rights and theenvironment, so that all people canincrease their prosperity.

What institutions can meet this demand?What form of government can emerge torival the strength of the market? This is atcore the debate about globalization—notthe details of trade, nor even the loss oflocal institutions and values, but how deci-sions will be made that affect what peopletruly value.

Clearly no one knows whether the nation-state will rise to this challenge, or somenew form of governance will evolve.

GLOBALIZATION

page 24

Regardless, the influence of the businesscommunity should be brought to bear tohasten the transition to commerce basedon the principles of Natural Capitalism atevery level, from local to national toglobal.

THE ROLE OF GOVERNMENT

There remains a vital role for governmentsand for civil society. It is important toremember that markets have purposes.They also have limitations. Markets makea splendid servant but a bad master and aworse religion. A society that substitutesmarkets for politics, ethics, or faith is dan-gerously adrift. Not all value can be mone-tized; not every priceless thing is priced.Nor is accumulating money the same thingas creating wealth or improving people.Many of the best things in life are not thebusiness of business. And as the Russiansare finding under “gangster capitalism,”unless there are democratic ways to estab-lish and maintain a level playing field, onlythe most ruthless can conduct business.

It is imperative, therefore, that we all takegreater responsibility in this debate. Myguess is that government will and shouldtrend toward stronger local control, whereagencies can understand and deal effec-tively with most of the problems that faceus. For the increasing number of problemsthat can be dealt with effectively only atthe global level, new forms of governanceneed to arise, including coalitions of com-panies, governments, and civil society, thatcraft responses to such challenges as cli-mate change or hunger.

However, any institutions that seek to sat-isfy this public demand must ensure thatall four of the engines of wealth creationare enhanced: they must promote produc-tive use of and reinvestment in human andnatural capital as well as in financial andmanufactured capital.

Businesses are starting to implementNatural Capitalism because it is profitable.The international agencies that seek toenhance the ability of business to tradeshould not ignore this trend. Unless theyexpand their underlying ideology to givedue weight to the values of human andnatural capital, they will weigh businessesdown with the ideology of the first indus-trial revolution, which sought to substituteplentiful, cheap natural resources forscarce people. That made sense in the1700s, but at the turn of the new millen-nium, continuedreliance on it willonly trap society inwasteful and eco-nomically inefficientbehavior. Even suchpowerful institu-tions as the multilat-erals must learn thisif they are toendure.

One of the easiestways to begin this isfor nations and the global institutions toplace the various multilateral agreementsregarding human rights and the environ-ment on an equal footing with trade priori-ties. In effect, the WTO and the otherboosters of globalization must promotetrade only to the extent that it embodiesthe principles of Natural Capitalism; other-wise they will continue to undermine thevery basis of prosperity and of life itself.

Governments, multilaterals, and compa-nies should also embed the PrecautionaryPrinciple in every decision-making frame-work. This principle, already supposedlyadopted by the Organization for EconomicCooperation and Development and theEuropean Union, has at its core the ideathat action should be taken to preventharm to the environment and humanhealth, even if scientific evidence is incon-clusive. It is already an element in many

international treaties, and has its roots inthe basic legal doctrine of negligence. It isalso sane behavior for any species desiringa lengthy tenure on this planet.

Finally, the multinational organizationsmust implement transparent and demo-cratic decision-making procedures. Anyunaccountable institution is by definitionstupid, lacking feedback. Organizationswith great influence will receive feedback.It is up to them to choose if they wish thisprocess to be orderly and informative ordisorderly and destructive. Any institution

with great power will gain and retain legit-imacy only if it is fair and accountable. Thegreater the power, the more the citizenrywill insist on accountability. In the InternetAge, that insistence is no longer confinedto traditional parliamentary democracies.

While some commentators say that global-ization is not a new phenomenon, butdates back to the advent of ocean steamersand the early trading companies, what issweeping the globe now is bringing bothopportunity and threat on an unprece-dented scale. That much is inevitable.What remains within our choice iswhether we as citizens decide to managethese changes, and use them to enhancelife, or whether we will leave those deci-sions for others.

Hunter Lovins is a co-founder of RMIand serves as its co-CEO (Strategy).

F a l l / W i n t e r 2 0 0 0

The WTO and the other boostersof globalization must promotetrade only to the extent that itembodies the principles ofNatural Capitalism.

F a l l / W i n t e r 2 0 0 0

page 26

RMIBOARD

RMI Board of Directors

Ruth Salzman Adams

Adam Albright

Robert A. Campbell

Myron P. Curzan

Michael Edesess, Chair

John C. Fox

Christine Loh

Amory Lovins

Hunter Lovins

Adele Simmons

Joanna Underwood

John B. Wing

Board Emeriti

Irvin C. Bupp

Dana Jackson

James T. Mills

Carol Noyes

Michael Stranahan

Special Advisors

Peter Bradford

David Brower

Dr. Jason Clay

The Very Reverend James Parks Morton

Robert Nagourney, MD

Jim Newcomb

Peter Schwartz

Bardyl Tirana

RMISolutionsRMI Solutions is published three times ayear and distributed to more than 20,000readers in the United States and through-out the world.

Please ask us before reproducing, withattribution, material from this newsletter.

Letters to theEditorWe want to hear your comments, criti-cism, or praise. Please address all corre-spondence to:EditorRocky Mountain Institute1739 Snowmass Creek RoadSnowmass, CO 81654-9199(970) 927-3851fax: (970) [email protected]

About the InstituteRocky Mountain Institute is an entrepre-neurial nonprofit organization that fostersthe efficient and restorative use ofresources to create a more secure, pros-perous, and life-sustaining world.

Our staff show corporations, communi-ties, individuals, and governments howto create more wealth and employment,protect and enhance natural and humancapital, increase profit and competitiveadvantage, and enjoy many other bene-fits—largely by doing what they do moreefficiently.

Our work is independent, nonadversarial,and transideological, with a strongemphasis on market-based solutions.

Founded in 1982, Rocky MountainInstitute is a §501(c)(3) /509(a)(1) publiccharity. It has a staff of approximately 45full-time, 48 total. The Institute focusesits work in several main areas—businesspractices, climate, community economicdevelopment, energy, real-estate develop-ment, security, transportation, andwater—and carries on international out-reach and technical-exchange programs.

BoardSpotlight:Christine Loh

Four RMI staff mem-bers traveledthrough Hong Kongrecently to consulton a variety of proj-ects. Each cameback with at leastone common percep-

tion—that RMI Board member ChristineLoh is a popular and influential figure inHong Kong and that people there arebuzzing about her effort to start a neworganization called Civic Exchange. Thebuzz has reached Business Week as well,which profiled Loh in its July 24 issue andnoted that “hers is the voice of a new gen-eration in Hong Kong.”

Loh recently stepped down from her posi-tion in the Legislative Council, whichhelps govern Hong Kong. To many citizensthere, it was a shocking announcement asLoh was the founder and leader of theCitizens’ Party.

“I am frustrated because the executivebranch sees the legislature as an inconven-ience that has to be overcome, rather thanas an active partner to build participatorygovernance,” she said when announcingher decision.

Loh, 44, is active in environmental affairsin Hong Kong, having worked to protectVictoria Harbour and to call the attentionof policymakers to the area’s air pollution.

Loh says her new effort will conduct policyresearch and push for changes by influ-encing lawmakers and other governmentofficials.

BENEFACTORS $10,000+Anonymous (3) John Allbar TrustCompton Foundation, Inc.The Concordia FoundationThe Energy FoundationMary & John Frantz,

in memory of Margaret FrantzRichard and Rhoda Goldman FundHoward Heinz EndowmentsWilliam and Flora Hewlett FoundationThe Home DepotThe Roy A. Hunt FoundationW.Alton Jones FoundationThe Joyce FoundationThe Lifebridge Foundation, Inc.Joshua MailmanSandler Family Supporting FoundationThe Shell FoundationSun Hill Foundation Tara FundTown Creek FoundationThe Walton Family Foundation, Inc.The Winslow Foundation

PATRONS $1,000 – $9,999Anonymous (5)The Airport Business Center FoundationBank of America Foundation Leslie & Rutgers BarclayPeter Barnes & Leyna Bernstein Barnes Will Berliner Sheila & Francois G. Brutsch Rev. & Mrs. C. Frederick Buechner Sandy & Albert Christensen Ferdinand Colloredo-Mansfeld Maureen & Craig Combes The Conservation and Research

Foundation John B. GilpinMark Gordon

Russell C. Jordan Jr.Amory LovinsLouise A. Maddux Enivonmental TrustTimothy H. McNerney &

Laura I. Mazza-McNerneyThe Alice P. and

L.Thomas Melly FoundationJune & Richard L. OttingerNathan Ohrbach Foundation Agi & Henry P. PlenkJohn W. Pope FoundationRobert J. Schloss & Emily Sack Seymour Schwartz Silicon Graphics Inc.Alice & Fred Stanback The William B.Wiener Jr. Foundation Betty Williams

SPONSORS $100 – $999Anonymous (6) Lorraine P.Anderson Ariel Capital Management Inc.Peggy Badenhausen & Thomas F. Kelly,

in honor of Adam FrenchEdward M. Bakwin BankBoston Teresa & Don K. Barth Franz Baumann Jeanie & Francis L. Bengtson, in honor

of the birthday of Anita GambosMaureen & Joe S. Benincasa William & Margaret Berry John L. Boehne Mr. & Mrs. James Bulkley Mary & William P. Bundy Judith A. Byrns & Joe L. Bergquist Pamela & Ronald B. Castle,

in memory of Molly StewartRalph Cavanagh & Deborah Rhodes Ziska Childs Lisa Christenson Carole & Peter Clum

Our sincere appreciation is offered to thesefriends who have contributed to RMIbetween January 1 and August 31, 2000.Numbers in parentheses indicate multipledonations. Please let us know if your namehas been omitted or misspelled so it can becorrected in the next issue.

GENERAL SUPPORT DONORS

INSTITUTE SUPPORTERS

Robert E. Corkran Marie Costa & William Yon Regan Michael F. Cox, in fond memory of Ian

Alexander Vallance, beloved father,husband, & colleague

Ewen Coxworth Cathryn & Thomas F. Crum James R. Custer,

in memory of John DenverRichard DeBroux Karen & Brian DunbarEric Enderton Richard Fagerstrom Steven Fedrizzi & United Technologies Ewan W. Fletcher Martha & Ralph E. Frede Karen Freedman & Roger E.Weisberg Alison C. Fuller Sandra L. Gekler Marian & A. Robert Gerecke Jr.Constance & Al Getman Shirley & David M. Ginzberg Jack W.L. Goering Ted L. Goudvis GraniteRock Catherine & Richard M. Gray Greening America Sadja Greenwood Katharine & Goodwin W. Harding,

in memory of Philip & Anne WeldMimi & W. Scott Harlan Erica Heftmann & Thomas A. Kraemer Benita HelsethAnne Hillman & George E. ComstockAlice Howard Hope Hughes Pressman James Hunt Sue K. Jackson & Robert M.Tanabe Edythe Jarcho William Joseph Mark JuedemanRichard Kaplan Helen J. Kessler William A. Kint,

in memory of Philip A. KintAlice Kleberg Reynolds Lorene T. Kuimelis Linda & Arie Kurtzig Laurence LaFond Carolyn & C.T. Lange

Anita Leick The Leighty Foundation Michael Leuck Joseph D. Maheady Robert L. Manning, in honor of Roy

Montague and Lynn & Don PadloKim Massie Photography Jan & Robert A. Marker Brad McBain,

in memory of Marguerite McBainPatricia B. McClearn Phymien Meach & Michael Andrews Betsy & Eric Mendelsohn Linda & Jonathan A. Menkis Cindy & Paul Miner Jayne & Fred B. Mosher Mountain Sports Marketing John M. Mullen,

in memory of Benjamin M. MullenF. Joseph Murphy Daniel Nichols Liliana Nikolich-Themelis &

Nickolas J.Themelis Patricia & Paul O’Connor Abby & George D. O’NeillParish Fund of The Tides Foundation Mindy Parker Marilynn J. Patzwald &

William C. Kostlevy Judith & Terry R. PenneySusan S-H Phillips Carol & William R. PriceThe Quaker Hill Foundation Carol & J. Billie Ray Jr., in honor of

Mother NatureReal Goods Joseph K. L. & Xiaomei Li Reckford John Reed Abigail Rome Linda & Guy Rutland Beatrice Santorini Marnie C. Schaetti,

in honor of Henry BranscombeRita J. Schnipke Marilyn & Michael G. Schooling Elizabeth & Gary M. Schwarzman Sherman Selden Frances Senska Fawn & John A. Shillinglaw Charlotte Shoemaker

F a l l / W i n t e r 2 0 0 0

SKS Inc.Barbara & Marc Slovak Robin Smith & Eric A. McCallum Steven J. Smith Barry D. Solomon Jean Spicer Smith Laurie & Robert C. Stovall Etel & Joseph B.Thomas IVJames H.TolsonUnited Way of King County David W.Vaughan Heather & Gary L.Vaughn Paul Wack, in memory of John DenverTim Wake Florence & Franklin Wallin Allene Walters Bonnie Waninger & Steven C. Smith Hal Weckler, in honor of Ellen WecklerMargaret & William E.Westerbeck Effie E.Westervelt Mary-Alice White Judson V.Wilder Jr,

in memory of Eulala FaddisE.Williamson Lisa Winters,

in memory of Cecil and Elva ButcherHerbert R.Wiser Barbara Zinn

ASSOCIATES $1 – $99Anonymous (32) John Accardi & Nancy Clarke Peter Adams Barbara Alter Danelle Ann Ardell & Neal R. Kushner Scott Armstrong Marilyn L.Arnold Jim Arnold Jr.Christine A.Asher Patty Atkins & Tom Brightman Jennifer Atlee Chad Bailey,

in honor of Richard R. BaileyWilliam M. Baldwin Victoria Balkoski & Paul Winkeller Brenda Balletto-Ferris K.Timothy Barry Christine A. Barsanti & Jim Gado J.A. Basson Jean L. Bell & Dwight Souder Kurt G. Benedict Hilary & Charles G. Bentley J.W. Bernsee

Lisa Bianco Jocelyn & Ron G. Billingsley BIW Connector Systems Mark Blandford John Bliese Esther & Francis L. Bligh Jacqueline Bogard & Jim Bell Stephen Bove Dorothy & Richard C. Bradley Muriel Brainard Anne & David R. Brower Lt. Col. & Mrs. Donald G. Browning Jan & William J. Bryan Elaine & Bruce W. Burley James F. Butler Beverly A. Campbell Bonnie Anne Campbell & Peter B. Cook Kathryn & Jefferson Carleton Center for Permaculture as Native

Science Peter Chapman Victoria & John F. Clancy Suzanne Clare Casey Coates Danson Winifred & Jack M. Colwill M.D.Sally & Joseph Conklin Judy Bruce & Erin Connery Tim Conroy Shawn L. Considine,

in honor of Thomas D. HarleyConsolidated Manufacturing Inc.Marcia Corbin Mirjana & L. H. Cornelius Arlan Crane Mary Dale & James E. Deacon Jim DeCecco Jeanne Deignan Kosmides &

George Kosmides Jon Dember John C. Dernbach Mike Derzon Grace Donovan Peirce &

Herbert R. Peirce III Phyllis & Roger L. Duba Marjorie Thompson Duck Andrew Dumitru D.T. Durnell & Susan Kerns Durnell William W. Durrell George Ehrhardt Carole & Stephen L. Eittreim John M. Ely Jr.Brent Eubanks Alice Evans

Katrina Luise Everhart June & David L. Ewing Eberhard FaehnrichDorothy K. & John T. Fankhauser Ralph Faust Jr.Cliff Feigenbaum Gerri Finkelstein Lurya &

Stephen D. LuryaHarry S. FlammDavid L. Fleener AIA Nancy Florence W. Kent Ford III Ken Frankel Lonnie Gamble Gannett Foundation Inc.Genet Garamendi & Martin Kurtovich Mr. & Mrs. George G. Gardner Peter Geiger Sophia W. Gillmann & Theo Wang Susan J. & Edward K. Goodhue Peter A. Greenberg Marji Greenhut Carol & Richard B. Greenwood Julie & Roger Grette Elizabeth E. GrindlayMary Joslyn Gurley Phyllis & Arvid Hagen Eldon Haines & Linda Rose Sarah Hammer & Haberl Jeff S. Haberl Marie & J. Samuel Hammond Christine & John Hamrick Shawn & William Harris K. Charles Hartranft John B. Hassett Mary Kimberly Hayes & Neil L. Rettig Chris Herman Jane & H. D. Hickman James J. Higgins Thomas E. Hitchins AIA Bud Hoekstra Molly Hollar Holocon Inc.Donna E. House Miriam Huelsmann Dr. & Mrs. Kenneth A. Jacobson Laura B. Jaffee & Alfred Saunders

Jaffee Donna & Jeffrey A. Jaffee Jane & William S. Jennings Martha & Harry C. Johnson Merrill E. Jones Dana Judy & Susan A.Weisner Charles R. Kane III

Kansas Building Science Institute Marion & Alexander G. Karczmar Karen & Bill Kaufmann,

in honor of Ethel LossingDebbie & John Kennedy Michael Kenniston &

Rosemary A. Di Nardo Joanne & Robert J. Kerr Thomas E. Kimmel Anne & Erik M. Kindblom Noreen Kinney Philip W. Klein Steven Koep Mr. & Mrs. E. L. Kopecky Shellie Rae Kovaleski Sabra Kranzfelder Driscoll Mary Rose Krygsman-Sinkin &

Lanny Alan Sinkin Gloria Kuang-Jung David Lamb Colette M. Lee David B. Lehr Nell F. LePla Elizabeth A. Littler Ingrid A. Louiselle Margaret & Daniel S. Lynch Michael L. MacDonaldHedy & Robert E. Marcotte David A. Martens Kathryn Martin & Franc Sloan Marcia & Stephen P. Martinson Brian Maurizi Richard McAnany II Olga & Frank McCoy Jacqueline McLaughlin Gouse &

S.William Gouse JrRobert S. Means John E. Menger Susan E. Merrill Chris Leary AIA Microsoft Corporation Elizabeth & James Mijanovich Cameron Miller, in honor of David SuzukiClare F. Moorhead Frank A. Moretti Gaard Moses Tatyana & Milton Moss Richard Murray David & Franchesca Napier National Renewable Energy Lab Nelson B. Nave AIA Herminia & Thomas R. Neet Jr.Louise & Erik K. Nelson Jacqueline A. Neurauter

Emily & John W. Newton Daniel Nichols Kim G. Noble William S. O’Donnell Jr.Ruthanne & William E. O’Neill Christopher O’Rourke Naomi & Eric J. Olson Patricia Olson Kradan & Kent Ostby Jill W. Over & Tom Mitchell Robert H. Palrud Donn R. Parsons Bev Payne C. Mary & Ivan Perisic Alison G. Peters Donald H. Peterson Elsie & Charles C. Petty Ernest F. Pieper Elaine & Steve Pike Richard F. Plage Steven R. Plotnick Donna Power Ann & David N. Prugh Christopher R. Purvis Frances & Albert Raboff Red Star Engineering John R. Reed Gwenyth & William D. Reid Colleen Reilly David M. Rich David Rindlaub Richard Riseling Robin & David S. Rittenhouse Sandra Roberts & David Rhoads William J. Robinson Jill Robinson Rockett Agrarian Jill Rosenblum Yvonne & Stephen T. Ross Monica L. Russell H. John Russell Ann & Loren L. Saari

Aileen Safford Shirley & Richard M. SalvettaW. Ralph Schaefer Karen Schmidt Joyce & David L. Schmoeger Mr. & Mrs. John Schukman Grace & Cyril J. Scripps James F. Senn & Rosemary Cseh-Senn Dr. & Mrs. Edward M. Shepard Noam Shore Marcia Shull Bernece & Marvin L. Simon Sidney H. Simon Leigh Sims Sioux Falls Rural Initiative Center Eric Parkman Smith David A. Soergel Gail & Gregory C. Speer Sue & Edwin G. Speir Dorothy & Clarence Stearns Victoria Stevens & Alan R. Drengson Michael Stewart Linda & John Stoddart Sally & John T. Sullivan Carole Tashel Susan K.Taylor Gervas S.Taylor Jr, in memory of Virgina

Elliot Taylor (12/30/21–12/20/99)Richard D.Thayer United Way of King County Eric & Cora Ustaris Judith & Terry R.Valen Nancy & Tom Vineski William Von Lackum II Ruth Shanti Wagner Lisa & John L.Wallace James L.Wallace Douglas P.Walter Laurie Turrell Ward George Washburn Barbara Wertz-Leiden &

Charles W. Leiden

Acquidata Inc.Tina J. Ball Deborah BershadStephen W. Biegel Daryl P. Bowman Jean Carlton Parker Lina & Aron Castro Todd Ciaravino Mr. and Mrs. Daniel W. Cook III Sandra & G. Edward Dodge Jaren & Bruce Ducker Lynn Eaton Jackson & Kirkman JacksonRoger Ferris + Partners LLC Honey S. Fishman FredSimon & Company Ltd Jennifer & P.M. Gibbons Kathy & Robert H. Gurland Stephen P. Hanson Carol Judelson, in memory of Eric &

in honor of Bud Konheim’s specialbirthday

Jane & Joseph Kasov Barbara Kolb & Seymour AugustBud & Colleen Konheim Carolyn Konheim & Brian Ketchum Christyne F. Lategano Nick S. Nicholas

Robert L. Lenzner Cynthia R. Lewis Nora Lobosco Dodge &

Geoffrey A. DodgeMareik Inc.Robert and Joyce Menschel Family

Foundation Allen J. Noveck Patricia & John Olds Dorothy R. Pace Dale L. Ponikvar Bernard G. Post Powers Global Strategies LLC Kelli & Allen Questrom Jean & Dan I. Rather Regele Builders Inc.Estelle & Steven J. Rose, in memory of

Eric & in honor of Bud Konheim’s65th birthday

Elisabeth Scharlatt-Gottlieb & Paul Gottlieb

Elyssa & Jack Schecter Carol & Ted Shen UNITE! Martin I.Vahtra Catherine Viscardi Johnston

SPONSORS OF THE ERIC KONHEIM FELLOWSHIP

FUND,IN MEMORY OF ERIC KONHEIM

C. Kenneth Whitley Margot & Scott D.Wilcox Joanne J.Williams Kris & H. B.Williams Patricia A.Wilson Lynn T & Joan Lee Winter

We also want to thank

those individuals who have

contributed to RMI

through Earth Share, the

Combined Federal

Campaign, and other

workplace charitable pro-

grams. If you would like to

have RMI as a charitable

option in your workplace

campaign, please contact

RMI’s Development

department.

FRIENDS $100–$499 Markell BrooksWayne Cogswell & Joanne HayHensley & James D. Peterson

ASSOCIATES $1-$99AnonymousAllison & Sean ArchambaultWilliam D. BlaneyJulia & Jack Burgen,

in memory of John DenverKim & Marshall Evans (3)Rhea & Larry EstesBarbara J. HibbardKate & Geir JordahlKristin & Craig S. LaughlinMargaret & Daniel S. LynchRobert T. Reed

SECURING THE

FUTURE DONORS

Paul Bartch (2)Laura & Joseph Bianchi (2)Earth Share (7)Lois-Ellin Datta (3)Donors of GiveForChange and

eGrants.OrgBarbara & Peter B. Fleming (8),

in memory of John Denver

Marjorie & Brian Gaffikin (2)Gap, Inc. (2)Rafeal Gonzalez-Vizoso MD (7)Charles Jaffee & Marvina Lepianka (2)Darla M.Tupper (2) Anna Ruthe Tyson (2)

FREQUENT GIVERS

F a l l / W i n t e r 2 0 0 0

Barbara E. Brayton,in memory of Robert Jay Brayton

Diane & Frank J. Busateri Jr. (8) Barbara S. Day,

in memory of John DenverCarol, John & Johnny Demetrio,

in memory of John DenverThelma & Jack B. Estep,

in memory of David TiceIris Feldman, in memory of John DenverVerena Frei Bishop & Gene Bishop,

in memory of John DenverDonna R. Fry, in memory of John DenverLaura Gardner Alexandria Gelencser,

in memory of John DenverSue & Terry E. Getz,

in memory of John DenverPatricia & Larry K. Good,

in memory of John DenverRon Harbeson,

in memory of John DenverCathryn M. Harrison,

in memory of John DenverKathy & Kurt R. Heilmann,

in memory of John DenverCharlotte A. Hernandez,

in memory of John DenverVicky J. Huerth,

in memory of John DenverBob & Sara Keckeisen (2),

in celebration of the life and inmemory of John Denver

Cheryl W. Kirksey,in memory of John Denver

Nelly & Craig S. Klein,in memory of John Denver

Connie Kobs Wanda & Edward T. Kollar Katrina Lichtenfels,

in memory of John DenverLeslie Martel Baer & Matthew Lee

Arnold, in memory of John DenverPatricia Miller,

in memory of John DenverDominique & Kenneth Mintz,

in memory of John DenverMartha & Bruce D. Morgan,

in memory of John DenverJanet L. Parsons,

in memory of John DenverDolores & Chuck S. Parsons,

in memory of John DenverDevota & Phillip K. Sheffield,


JoAnn Simms, in memory of John DenverMelissa Stegeman-Roberts & Rick E.

Roberts, in memory of John DenverSandra L.Wayne Ann E. Zahn, in memory of John Denver

BENEFACTORS $10,000+Rocky Mountain Elk Foundation

PATRONS $1,000–$2,499 Environment Foundation

SPONSORS $500–$999Betty,Tom & Justin K.Wagner

FRIENDS $100–$499Amgen Foundation William C. Ball Jonnie Ann & Jack Bentley Ellen Bigelow,

in memory of John DenverKathryn CarrHollie K. Carter,

in memory of John Denver Holly & James Clifford Jr.,

in memory of John DenverSuzanne E. Cole-Rice & Robert T. Rice,

in memory of John DenverMr. & Mrs. Cotnoir, in memory of John

Denver and his fine workGail & Gerald Cullinan,

in memory of John DenverConrad M. Dahl,

in memory of John DenverBarbara & Peter B. Fleming (2),

in memory of John DenverCarolyn Hayden,

in memory of John DenverLynni Hutton, in memory of John DenverIt’s About Time Fan Club,

in memory of John DenverThe Leighty FoundationJoy C. Mayfield,

in memory of John DenverSusan S. McKibbin Shannon & Gary Mueller, in memory of

John Denver, his vision and his desireto make a difference.

Judy Pollock & Steve Walker (2),in memory of John Denver

Jen Seal Uncapher & Bonny Seal,in memory of William Vincent Seal

Maria C. Silva,in memory of John Denver

ASSOCIATES $1–$99Grace & Bryan T. Bailey (15),

in memory of John DenverPamela L. Bio,


WINDSTAR LAND CONSERVANCY DONORS

Windstar’s New WhaleOne of the Windstar Land Conservancy’s trademarkimages is a whale sculpture encircled by an open geo-desic dome erected in the early 1980s by the WindstarFoundation.This year, Windstar members Greg and Susan Gilles ofWhidby Island, Washington spearheaded a project toreplace both the dome and the sculpture. With DexterLewis and Scott Bergman, they cut structural mem-bers for a new dome based on the originalBuckminster Fuller design and Lewis carved a newwhale sculpture from a massive piece of driftwoodfound on a nearby beach.On Memorial Day weekend, 30 volunteers helpedassemble the new dome, dedicate the new whalecarving, and place a time capsule to be opened in 50years.

Dan BakalCharlotte D. ButtrickCindy & Peter D. Curran, in memory of

David & in honor of Diane Batty’sbirthday

Carol EsfordEdra & Delbert L. EstesExxon Annuitant Club of Central FloridaMr. & Mrs. S.B. Famous Jr.Brenda & Robert A. Grover, in memory of

David & in honor of Diane Batty’sbirthday

W.Alton Jones Foundation

Margaret & Jeffrey A. KellamLeslie A. KelleyChristopher D. KelseyAnna L. LawsonCarolyn Leaman McNabney &

Nellie R. LeamanJan & Marty MorrisJoan & Henk W. RauwerdinkSilver Clouds ChorusSilver Clouds OrchestraSt. Cloud First United Methodist Church

Choir

SPONSORS OF THE DAVID TICE FELLOWSHIP

FUND, IN MEMORY OF DAVID TICE

DANA MEADOWS, CO-AUTHOR OF

Beyond the Limits and a long-time friend of RMI, likes to

hand out a one-page sheet titled “Places toIntervene in a System.” Based on hermany years’ studying the behavior of com-plex systems, it’s a list of eight approachesto creating societal change, ranked inorder of influence.

Interestingly, the techniques manyactivists emphasize—government regula-tions, tax rates, and so on—rank near thebottom. Tops on the list? Changing “theparadigm of the people who have powerover the rules.” Change the way those keydecision-makers think, and they’ll changeeverything else. That’s where the greatestleverage lies.

To that end, RMI staffers spend a greatdeal of time focusing on what we callstrategic influence—”influencing the influ-ential” by creating and exploiting “teach-able moments.”

What are the keys to a successful effort?“Access, message, and delivery,” saysRMI’s Amory Lovins. “First of all, you’vegot to get their attention. Almost always,that means going to them—preferably attheir invitation—and working with themin their office, on their turf.”

Ironically, sometimes the higher up theorganization, the more eager the set ofears. “Heads of state seem starved forinformation,” says Lovins. “They are oftenheld in an inner ring by senior advisors.”

But what happens once you’re in thedoor?

“You have to address their problems,”notes Lovins. Rather than lecturing, herecommends respectfully suggesting solu-tions that the decision-maker can use to

shape to his or her political and economicsituation.

Lovins and other RMItes are finding thatthe concept of Natural Capitalism is politi-cally effective because it speaks to a widerange of conditions and experiences.

Here’s an example from Canada, whereLovins has been working on energy issuesfor three decades.

On a recent visit, Lovins dined withFinance Minister Paul Martin andEnvironment Minister David Anderson.“They seemed taken with the ideas ofNatural Capitalism,” he says. “Theyunderstood the benefits of advancedresource efficiency and they could easilysee principle three—selling services asopposed to producing goods—beingapplied to a primary resource economylike Canada’s. I asked, ‘Do you want tosell tons of stuff, so efficiency cuts yourrevenues, or services, so it cuts yourcosts?’ There are examples of how theycould sell services in both the forestry andmining sectors.”

The next day, Martin gave a speech thatcaught the attention of many for itsemphasis on environmental themes.

A newspaper story in the June 19 OttawaCitizen on Anderson’s policies reportedthat Anderson “has a powerful ally inFinance Minister Paul Martin, the one-time opposition environment critic.

“Mr. Anderson and Mr. Martin recentlyhad dinner with Amory Lovins, co-authorof Natural Capitalism, a book thatdescribes the ‘new industrialism’ that ismore efficient, profitable and environmen-tally friendly.

“Mr. Martin, in a recent speech, picked upon the book’s theme: ‘If we are to moveforward toward our goal of sustainablecommunities, we must be willing toaccept a new approach, one in which eco-nomic and environmental considerationsare no longer viewed as separate entities.’

“Mr. Martin says Canada needs to userenewable energy like biomass fuels, solarand wind power on an industrial scalewhile abandoning ‘the very concept ofwaste. The traditional model takes invirgin materials at one end, creates wasteand emissions during production, andthrows away potentially valuable materialsafter consumer use,’ he says, soundingmore like an environmentalist than afinance minister.”

That last phrase is music to Lovins’s ears.“A message like that always carries moreweight when it comes from the financeminister, especially to the business com-munity,” he says. “It can lead to a changein tax and fiscal policy, which can influ-ence business. It can create a level playingfield for investment in resource efficiency.”


CANADIAN STRATEGIC INFLUENCEChanging the Rules By Changing Minds

F a l l / W i n t e r 2 0 0 0

Canadian Finance Minister,Paul Martin

F a l l / W i n t e r 2 0 0 0

Rocky Mountain Institute/ volume xvi #2/Fall/Winter 2000Rocky Mountain Institute/ volume xvi #2/Fall/Winter 2000

NON-PROFITORGANIZATIONUNITED STATESPOSTAGE PAID

SNOWMASS, COLORADOPERMIT NUMBER THREE

Rocky Mountain Institute

1739 Snowmass Creek Road

Snowmass, CO 81654-9199

IN THIS ISSUE: ■ ENERGY: China: Overcoming Coal

■ CLIMATE: Australia’s Climate Challenge ■ NATURAL CAPITALISM: The

Impact of Globalization ■ Strategic Influence in Canada ■ Nat Cap in

Cleveland ■ GUEST COLUMN: Leadership for the Global Century

■ PERSPECTIVES: What’s Possible May Not Be Wise ■ ASK ROCKY:

Alcoholic Cars, Houseboat Power ■ HOT SEAT: Faceoff on Energy &

Climate Claims ■ RMI NEWS: Goats, Kids, and Greener Pastures

■ What Are You Reading? ■ Life at RMI

RMISolutionsRMISolutionsn e w s l e t t e r

rmisolutions newsletter 5 · 2020-03-20 · tricity created by central power plants—a system that...

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