Sustainability and Self-Interest
John Elkington argues in his latest book that a new set of entrepreneurs in business, government, and universities are reinventing capitalism.
Zeronauts: Breaking the Sustainability Barrier
304 pages, Routledge, 2012
John Elkington is an optimist. In his new book, Elkington, an authority on corporate responsibility and coiner of the term “triple bottom line,” argues that a new set of entrepreneurs in business, government, and universities are stepping up and taking actions that will help us to reinvent capitalism, combat climate change, and reduce our exposure to toxics.
Let’s start with the definition he provides early in the book.
ZERONAUT, n. 1. An inventor, innovator, entrepreneur, intrapreneur, investor, manager, or educator who promotes wealth creation while driving adverse environmental, social, and economic impacts toward zero. 2. Someone who finds, investigates, and develops breakthrough, footprint-shrinking solutions for the growing tensions between demography, consumerist lifestyles, and sustainability. 3. Political leader or policymaker who helps to create the regulatory frameworks and incentives needed to drive related “1-Earth” solutions to scale.
Although Darth Vader would not aspire to join this club, many other people would like to be part of the solution. In a world of 7 billion people, there are a huge number of potential producers of game-changing ideas. Some work on discovering medical breakthroughs, while others focus on creating Facebook-like Internet startup companies. How do such ambitious, talented people choose which hard problems to work on? Put simply, when would the profit motive alone—without any virtuous Zeronauts—be sufficient to give us the “green capitalism” that Elkington argues is on the horizon?
Consider the challenge of male baldness. As a 46-year-old man without much hair, I have thought about this issue. If I were the only bald man in the world, then no for-profit drug company would spend a cent researching a solution to my problem. But when millions of people have this problem, there is huge aggregate demand and a jackpot for the company that can develop a solution (i.e., Rogaine). Old-fashioned capitalist price signals direct this entrepreneurial activity. Although some efforts will fail, some firm will succeed, and millions of men will smile again. This example highlights that anticipated desperation creates a profit opportunity and then triggers efforts to find a solution.
So what’s the difference between baldness cures and innovations that enhance sustainability? Elkington argues that status quo capitalism lacks imagination and ambition. Zeronauts, he writes, “aim to get our competitive juices fl owing with a ‘Race to Zero’ framing of their initiatives—whether it applies to toxics, greenhouse gases, or poverty. They start from the assumption that there is a fundamental design fault in capitalism—both in its prevailing paradigm and in the linked mindsets, behaviors, cultures, economic formulae, business models, and technologies.”
As a University of Chicago-trained economist, I see no “design fault” in capitalism. Instead, I see un-priced externalities. Despite the fact that the US House of Representatives passed in June 2009 the American Clean Energy and Security Act that would have introduced incentives and regulations for de-carbonizing the economy, the Senate chose not to vote on this legislation and President Obama did not resuscitate it. In the absence of federal legislation, auto manufacturers and power plants have little incentive to economize on greenhouse gas production. Higher fossil fuel prices would nudge them to do so, but the recent discovery of vast amounts of accessible natural gas in the United States and Canada suggests that “peak oil” may be far away. We would not need to celebrate the rise of the Zeronauts if the United States had introduced carbon pricing.
Elkington is 100 percent correct to focus on experimentation and to celebrate the power of game-changing ideas. The Zeronauts will succeed in achieving large-scale sustainability improvements in cases where there is a market price signaling scarcity. For example, if consumers face higher prices for resources such as water and electricity, this would stimulate more entrepreneurial activity focused on economizing on these resources. But I am pessimistic that the Zeronauts will succeed in de-carbonizing our economy. In the absence of carbon pricing and in a growing world economy, global greenhouse gas emissions will rise. Can the Zeronauts figure out how to convince China not to burn its coal endowment? Anticipating that the answer is “no,” I published my 2010 book, Climatopolis, in which I optimistically argue that profit-seeking entrepreneurs will figure out many new strategies to help us adapt to climate change.
Elkington’s book is a valuable contribution at the intersection of business and sustainability. He is right to emphasize that human ingenuity, passion, and experimentation will play a crucial role in helping us to avoid the nightmare scenarios predicted for the 21st century and beyond.