Econosystemics reframes economics to focus on the creation and accumulation of value, not only in human society, but also in this gloriously complex biosphere we are part of.  We’re all in this together, and it isn’t a zero-sum game.  There is hope for us all.

That is a very different approach from the economics that is taught in our universities and business schools, in which the emphasis is on the pricing and allocation and of scarce resources.  Not only in the textbooks, but also in popular discourse, the focus is on a consumption-driven, human-only economy.   Corporations, in this paradigm, compete to satisfy the pre-existing consumption demands of households.  Households return investment and labor to the corporations, and aside from resource scarcity and waste, that’s the closed loop.  Economic growth, deemed essential to a healthy economy, is about continually increasing production and consumption.  Running faster and faster in the rat-race; the devil take the hindmost.

But life isn’t that neat and simple, nor so bleak..  Life on Earth is an open thermodynamic system, receiving energy from the sun and converting it, somewhat chaotically,  into more life — or into things which have value for life.  Life on Earth is a complex, dynamic system that keeps on evolving.  Human economic activity is not fundamentally different from all the rest of life, we just take it to a different level.  We channel energy from various sources through our economic infrastructure to create value: the things that we need or want.  We consume much of that value, but a substantial fraction gets reinvested into our ever-evolving infrastructure.  In that regard, it is a virtuous cycle of value accumulation.

We are, however, destroying value within the larger ecosystem.  Humans are now a dominant force of change, responsible for environmental disruption and rapid biodiversity loss.   Econosystemics, therefore, looks at our value creation in context: what value is, and how it is created and destroyed in a complex dynamic system that includes not only what we call “the economy”, but also our quality of life and all of what we call our “environment”.  Econosystemics considers not just a flow of value from “nature” to human society, but examines the flows of value in all directions within the whole ecosystem web.

Econosystemics doesn’t ignore consumption, but it notices that new value creation precedes demand.  For a company like Apple, for example, the marketing mantra isn’t “Find a need and fill it,” but “Create a new need.”  In econosystemics, what matters is not economic growth but economic development, which can be defined as the net accumulation of value within our entire biosphere — made thermodynamically possible by a flow of energy.  If economics is the “dismal science” focused on scarcity, econosystemics is a “hopeful science” that offers the promise of human “progress” without deprivation of the many for the sake of the few, and without the destruction of our vital biosphere.

It is very important for modern corporations to internalize this viewpoint as part of their culture.  The most successful corporations, in the long run, are not those that focus on building today’s products more cheaply, but those that are inventing new technologies and new ways to create and accumulate value.  The most successful companies, in the long run, are not those that exploit their employees and communities, but those that invest in their employees,  communities, and the environment.  You see this in the trend towards corporate co-opetition, in the success of companies like Google and Apple, and in the movement towards multi-stakeholder, environmental and social responsibility.

Where this is heading is towards a responsible society of corporations, in which an informal and formal social contract emerges that enforces norms and disciplines corporations that are blatantly destroying value, whether by environmental destruction or by promoting and profiting on war and social conflicts.    This isn’t just about morality; it’s about business, too. Companies that can refocus their activities away from debt-fueled, unsustainable consumption and towards an ongoing accumulation of value within the econosystem will be the most successful companies of the next decades.

Gregor argues that despite coal being much more dangerous than nuclear, the public’s irrationality will always react more strongly against rare but spectacular nuclear accidents. Combine that irrational fear with the cold hard economic fact that coal energy is much cheaper than nuclear energy (externalities excluded), and nuclear doesn’t stand a chance.

In the short run, this is a very strong argument, and I wouldn’t advise making short-term financial bets against Gregor’s analysis. But if we take a longer run view, in which corporate interests dominate political decisions and exponentially improving technologies dominate the Technium, the energy density of nuclear will win out over digging coal, fracking for gas, or covering every possible surface with photovoltaics.

Exponential technological improvements will be applied to all energy sources, of course, as well as to energy efficiency. Solar energy harvesting, in particular, will become much cheaper and efficient. Energy storage and transmission also will improve, allowing us to better utilize the solar energy we collect. Robot mining and carbon sequestration could make “clean coal” more of a reality. But nuclear energy will always beat out everything else in terms of energy density. And here is the time-tested rule: Life, writ large, has never failed to exploit the highest density energy potentials it can crack open.

At present, coal and gas have more billionaires, and thus more political power, than does any alternative for electricity generation. But the Technium’s thirst for more energy is unslakeable. Not only do six billion people want to come up to the consumption zone of the top billion, but exponential technologies will demand exponentially more energy, even as they become exponentially more efficient. Just consider computer processing: while it has become millions of times more energy-efficient over time, total power consumption due to computing has simultaneously increased exponentially.

Coal and gas can’t keep up with that trend for more than another decade. Ray Kurtzweil is sanguine that solar will meet all our energy needs in 20 years, but I think he is underestimating exponential growth in energy demand, and the exponentially increasing surface areas solar will require. Nuclear, however, can provide an intense, steady energy gradient within a very small footprint, scalable to any conceivable demand. That’s what the Technium wants; and what the Technium wants, it finds a way to get.

Political power in the United States supposedly rests in a democratic social contract, a government of, by and for the people. In reality,however, democracy is at best only a safety valve for political control by the powerful. Public opinion is shaped by money flow and media control. The influence of billionaires and large corporations manipulates public opinion to serve their own competing interests. It is the society of corporations, not the society of voters, which will decide the fate of nuclear energy.

Here is what I think will play out in the next two decades. In the short term, competition among powerful corporations and individuals, and concerns over nuclear terrorism, will outweigh concerns over climate change and biodiversity collapse. Natural gas, temporarily plentiful and cheap, will be the ascendant energy source of the decade. Coal plants will continue to proliferate like bacteria on a forgotten pot of chicken soup.

But along about 2015, the balance will shift. New capabilities for compact, factory-sealed, rail-transportable nuclear cores will completely change the economics of building nuclear plants. A next-generation of thorium-based reactors will be in development. A few large thorium –or, potentially, fusion– reactors will be able to serve as “incinerators” consuming nuclear waste from other reactors, from weapons, and from other sources. Increasingly sophisticated global surveillance and response systems will help guard against nuclear weapons proliferation and terrorism (sorry, privacy advocates). The accelerating impacts of climate change and biodiversity will foster more international cooperation among the powerful. Around about 2015-2018, the society of corporations will reach a consensus: the Technium needs nuclear.

When the society of corporations, expressing the unconscious but irresistible will of the Technium, decides to pursue nuclear energy, you can be sure that public opinion will follow right along. Factory-style production and improved safety and security systems will enable an extremely rapid deployment over the decade following that. Modular will be used as “drop-in” replacements for aging coal plants, leveraging existing power distribution systems. Economies of scale will rapidly reduce costs of deployment.

Gregor says he’ll bet that nuclear never cracks 10% of total world energy supply. Kurtzweil says in 20 years solar will provide all of our energy supply. I say they are both wrong. I’ll bet that nuclear (fission and/or fusion) is 10% of world energy supply by 2025, and 50% by 2030.

The Fukushima nuclear disaster gives rise to many consequences, for the people and country of Japan, but also globally: consequences for the nuclear power industry, for energy more broadly, and for our ability to effectively address the challenge of climate change.  Politics will play at least as large a role as pragmatics.

My observation of prior corporate disasters suggests that the immediate pronouncements (e.g. nuclear power is dead) may be overstated.  We’re still drilling offshore after last year’s BP disaster in the Gulf of Mexico, for example.  And climate change realities, barring some amazing new technological discovery, could mean that nuclear power remains a necessary part of the mix despite these resurgent safety concerns and the high cost.  Solar, by contrast, requires more land and at least currently seems to hold less promise for efficiently meeting the rapidly growing global energy demand.

The possibility of fuel rods igniting, newly raised by the incident in Japan, has elevated the risk profile of nuclear power in the minds of many experts.  The NYT and other media outlets are linking nuclear safety risks from acts of terrorism to the recent reminders of vulnerability from natural disasters.  Waste disposal remains an issue.  Although France and other countries using nuclear to a larger degree than the US have managed to handle spent fuel using a variety of storage approaches, the perceptions and the political dimensions of safety and waste disposal issues may be more significant than the substantive concerns in terms of whether and to what extent nuclear power proceeds.

In the short term and medium term, natural gas looks relatively better to most decision makers (since it’s cheaper and likely to remain so for the foreseeable future), despite being a finite resource subject to its own environmental and other risks.  The delay in climate change legislation only makes this more the case.  Japan will likely turn to natural gas to make up gaps in electricity generation.  At least natural gas involves lower emissions than coal. US policymakers have more flexibility than, say, French policymakers on this score (given the 80% dependency of France on nuclear energy at present).  They will thus find natural gas persistently attractive given the recent discovered US supplies – despite residual concerns over hydraulic fracturing (“fracking”).

The rest of the world is reviewing pending nuclear plant projects and viewing the industry more skeptically, but it is frankly hard to see how large nations like China can conceivably meet their burgeoning demand for energy without relying in substantial part on nuclear.  The pragmatic truth is that not just China but all of the developing world needs lots more energy.  Even with substantial gains in efficiency, a full tilt deployment of wind and solar wherever financially and politically feasible, and rapid increases in the use of natural gas, a large gap is likely to remain.  That gap will be filled either by nuclear energy or by coal.

Of the two, coal is the more dangerous:  more climate impact, more habitat destruction, more pollution, and many more industry deaths. If we can avoid Chernobyl-scale accidents, radiation exposure from nuclear energy is surprisingly negligible from a social standpoint (though perhaps not to individual victims, of course).   A recent chart by Randall Munroe shows just how negligible, even in the case of accidents like Three Mile Island and Fukushima.

The disaster in Japan does suggest corporate overconfidence and possibly even negligence, however.  Corporate Social Responsibility (CSR) concerns would counsel greater due diligence and both human rights and environmental risk assessments in light of the Japanese disaster, as contemplated by the recent UN Framework on Business and Human Rights and the UN Special Representative’s recently released draft Guiding Principles on Business and Human Rights.

Core CSR principles – including integrated decision-making, stakeholder engagement, transparency, consistent best practices, precautionary risk management, accountability, and community investment — all apply with great force to these issues of nuclear power. Integrated decision-making requires a look at environmental and social sustainability issues as well as economic issues. Stakeholder engagement is essential at all levels in order to proactively address the concerns of affected communities.  This in turn depends on greater transparency on the part of governments as well as utility and energy companies, including regarding design parameters, resilience, and safety plans.  Without such public processes, there’s little hope of restoring public trust and confidence and the reputation of nuclear power.

The latest best practices must be adopted and consistently adhered to, including construction and siting practices and safety improvement features such as having reactors widely separated on site and stronger containment vessels, as well as new approaches such as modular nuclear that are accompanied by equal or greater attention to safety.  In some cases, decisions to site plants over existing fault lines, for example, should be reconsidered.  Passive cooling (where systems don’t need external power to function) provides an additional margin of safety in the latest generation of nuclear power plants.  Aging reactors may need to be completely replaced instead of being repaired.  Disaster response plans should be reviewed to take into account lessons from Japan.

These issues should be considered now, instead of waiting for decades after the initial operation period until relicensing is considered.  Sensible application of a reasonable version of the precautionary principle and effective risk management is now more needed than ever – not such a strong version that all progress would be halted, but a more cautious assessment and modifications of current approaches to nuclear power.

Society also deserves a look at accountability mechanisms, given what’s happened in Japan.  As with the pre-BP oil drilling laws, the nuclear industry globally operates under capped liability for impacts caused by the reactors.  New approaches that take into account compensating victims for damages are overdue.  Regulators should also review the relevant planning zones (ten miles in the US).

None of the above, however, suggests that we should stop using nuclear energy.  The petroleum and coal industries have been guilty of much greater negligence regarding safety and environmental damage, and even willful and systemic violation of human rights in numerous cases. The Japanese disaster certainly places new imperatives on confirming that public concerns about this source of energy be addressed and not dismissed.   Rather than ban nuclear power or completely stop technological refinement, however, the incident in Japan should prompt renewed investment in safer and even more reliable and cost-effective nuclear power.

——————-

Chip Pitts teaches corporate social responsibility and sustainable development at Stanford Law School and Oxford University.

Excerpts from Poverty and Human Rights by Thomas Pogge, 2007:

“The  statistics are appalling. Out of a total of 6575 million human beings, 830 million are reportedly chronically undernourished, 1100 billion lack access to safe water and 2600 million lack access to basic sanitation (UNDP 2006: 174, 33). About 2000 million lack access to essential drugs (www.fic.nih.gov/about/summary.html). Some 1000 million have no adequate shelter and 2000 million lacked electricity (UNDP 1998: 49). Some 799 million adults are illiterate (www.uis.unesco.org).

“Roughly 1/3 of all human deaths, some 18 million annually, are due to poverty related causes, easily preventable through better nutrition, safe drinking water, mosquito nets, re-hydration packs, vaccines and other medicines. This sums up to over 300 million deaths in just 17 years since the end of the Cold War–many more than were caused by all the wars, civil wars, and government repression of the entire 20th century. Children under five account for nearly 60% or 10.6 million of the annual death toll from poverty related causes (UNICEF 2005: inside front cover).

Systemic Poverty:  Poverty which is pervasive with a geographical region over multiple generations, or pervasive within a particular social, ethnic, or religious class within a geographic region.  Systemic poverty is reinforced by persistent cultural divisions, exploitation under dominant sociopolitical powers, ongoing environmental degradation, or persistent armed conflict or occupation within a region.

Circumstantial Poverty: Poverty of individuals or families due to misfortunes of health, career, mental disabilities, natural disasters, or other factors outside of a context of systemic poverty.

The greatest number of people living in near absolute poverty, of course, falls into the category of systemic, emerging nation poverty. Of these, around 60% live in rural areas, and on average suffer more absolute poverty than do the urban poor.

World Poverty Map:   Percent of Population Living Below Poverty Line  (as defined by each country)

Source:   http://www.indexmundi.com/map/?v=69

On the map above, China looks as rich as the United States, and India looks no worse than Argentina, while much of Africa and Latin America look the worst.  This is both because in differences in how poverty is defined, and also because the percentage of a nation’s population in poverty is not the same as the percentage of the world’s poor living in that nation.

The world looks very different if we look at absolute numbers of people living in absolute poverty (in this case defined as $2 per day or less.  This map below, from Worldmapper (http://www.worldpopulationatlas.org/), distorts the size of each nation according to the number of people in that country living on $2 per day or less.  While in the previous map above we saw various sub-saharan African nations with the highest percentage of their population in poverty, the map below shows that China and India have the greatest number of people in absolute poverty.

Worldmapper Poverty Map: Country size distorted in proportion to number of people in absolute poverty.

Exponential Wealth:

It is very difficult to accurately assess wealth holding globally, but the chart below shows the result of one careful attempt to estimate the distribution of global wealth. [Data for chart taken from UNU-WIDER World Distribution of Household Wealth, 2008]

But so what? Is concentration of wealth a problem, or a solution? If we replace the dollar signs in the chart above with loaves of bread, then it would obscene to have two people with forty loaves and one hundred people sharing a single loaf. Substituting in mansions and yachts versus hovels and rickshaws would hardly change the perspective. But what of Warren Buffett, who lives in a modest home despite his vast wealth? Most of the world’s wealth is not embodied in currency or consumables, but in productive assets — or more accurately, in organized systems of technology and social institutions that use energy and create valued products and services. These organized systems not only create wealth, they are wealth. The chart above illustrates, in large measure, the degree of ownership over the socio-technical systems of human society — what author Kevin Kelley calls “the Technium.”

The Econosystem Pyramid:

source:  Bryan Long, Econosystemics.com

Econosystem:  The global system of value production and exchange, including human individuals, human social entities, technologic systems, managed biosystems, and wild biosystems. The econosystem, like all adaptive dynamic systems, develops and utilizes available energy sources in order to make material and organizational transformations.

Each node in the diagram above can be considered a representative individual (or entity) within the econosystem.  Prior to the industrial revolution, the econosystem was powered primarily by biomass collected by the human population, using basic technologies (low-technium).  With the industrial revolution, beginning around 1775, large flows of energy and resources began to bypass the majority of humans under control of the higher sociopolitical layers.  As represented by the dark arrows, fossil fuel and mineral resource flows fed a rapidly developing “high-technium”, implemented by engineers, architects, and managerial talent, and controlled by “capitalists” or political leaders.  The lower social majority had to find a way to serve the Technium as “labor”, or continue basic subsistence largely outside the transformational processes of the Technium.

At the present time, approximately ten to twenty times more energy flows into the Technium from fossil or other non-biological sources than flows into it from biological systems.   Furthermore, the greater percentage of biological resources also bypasses people at the bottom of the pyramid:  large landholders using highly mechanized methods and lots of fossil-fuel-based inputs (illustrated by downward reaching dark arrows) feed bioresources into the middle and upper classes.

In the diagram above, a “highly developed” nation is depicted in the central vertical portion of the pyramid. A disproportionate percentage of energy and material resources flow to the members of the developed nation. The majority of the population lives fully within the Technium (including those “upper layer” individuals enjoying ownership and control of the Technium).  For the most part, the Technium is their environment — they make only recreational visits to “enjoy nature”.  The “middle class” is well-developed. Relatively few individuals in live in absolute poverty, and those few are mostly circumstantial rather than systemic.  Considerable numbers, however, live in relative poverty compared to the majority of citizens in their nation  — but their circumstances would generally be seen as fortunate by the absolute poor in underdeveloped nations.

An “emerging” nation is depicted in the left vertical portion of the pyramid.  Here large populations live in or near absolute poverty, both in rural areas and in urban slums.  At the same time a strong middle class is emerging within a rapidly developing technium, strong interconnections exist with developed nation economies, and members of the financial elite are part of a strongly interconnected global elite.

A “low-development” nation is depicted on the right vertical portion of the pyramid.  Here a privileged few enjoy great wealth based upon control of resource extraction, and trade, political systems are generally non-democratic, the middle class is sparse and of low financial strength, and the majority of the population hover near absolute poverty.

It is important to note that the entities in the “control” layer are, more often than not, corporate entities rather than individual humans.  In the future, the upper regions of the pyramid may be occupied as well by “technologicaly enhanced” humans and even fully electronic entities!   The econosystem emerged from homo sapiens, but it will most likely outlast that species!

…Next: Alleviating Absolute Poverty

Traditional aid charities give food, clothing, and medicines. More development-oriented programs try to improve agriculture, education, healthcare and infrastructure.  Microfinance programs let the entrepreneurial poor take the initiative to improve their own lives. Even so, the UN Millennium Development Goals for 2015 seem unlikely to be met. Even so, more than 20,000 children die each day due to poverty.

Meanwhile, this week in the United States, an IBM supercomputer named Watson easily defeated the two most successful past winners of the popular game show Jeopardy.  Watson was able to figure out the convoluted phrasing of the Jeopardy questions and come up with a confident answer, or sometimes an educated guess, faster than the human contestants.

Let’s consider who or what Watson is.  IBM states that:

“Watson is made up of a cluster of ninety IBM Power 750 servers (plus additional I/O, network and cluster controller nodes in 10 racks) with a total of 2880 POWER7 processor cores and 16 Terabytes of RAM. “

Wow!  Sounds powerful, and it is.  Each Power 750 server consumes, according to specs, 1950 Watts.  Ninety of those adds up to 175.5 kilowatts.  With all those accessory components, let’s round it up to 200 kW.  By way of comparison, that’s about 10,000 times higher than a laptop computer.

With all that computing power, Watson successfully emulates and outperforms the human brain at finding answers to questions of fact presented in natural language.  Quite an advance for computers, and a sign of things to come.  I have no doubt that we will soon have computers that can converse with us and outperform us in surprising ways.   I have no doubt that some time in the not too distant future there will be computer brains with consciousness, that will far transcend the capabilities of the human brain.

But in the meantime, a human brain is still one heck of a powerful supercomputer. A human brain can process and correlate disparate sensory information, generalize, speculate, initiate, validate and solve a wide variety of problems in ways that are way beyond Watson’s capabilities.  And a brain is SO much more energy efficient.  Watson’s hardware consumes about 200,000 Watts of energy flow.   A human body consumes about 100 Watts.   So the fair comparison based on energy use is not Watson against two humans, but against two thousand!

Watson’s hardware alone costs over $1,000,000; with software its price climbs to multiple millions.  Amortized over seven years, that’s perhaps $1,000 per day, not including power, air conditioning, maintenance, and operator expenses.  Add those in and Watson probably costs about $5000 per day.

Meanwhile, there are three billion brains out there trying to survive on $2.50 per day.  Double their daily income to $5 per day and they could more properly feed and train their brains.  At $5 per day per human, the cost to operate one Watson equals the cost to sustain one thousand humans!  I’m not arguing that Watson is a waste of money. My point is that there is a lot of underutilized and inexpensive brainpower out there. What if we could tap into it?  Can we figure out a way for the poor to earn income through brainwork rather than begging or back-breaking labor?

It’s not as far-fetched as it might seem.  There are now over 5 Billion mobile phone subscriptions worldwide, with over 70% of them in the developing world.  Mobile phone penetration in the developing world is now about 68 subscriptions per 100 people.  There are also now more Internet users in the developing world than in the developed world.  Most do not own their own computers, but rent time at Internet cafes or retail storefronts.  Over the next five years, it is likely that most developing world subscribers will swap out their old phones for inexpensive smartphones that can provide Internet access. Over the same period, cellular networks will be upgraded to provide limited Internet access even in rural areas.

Cell phones provide many benefits to their owners, but we can also see them as a way to access the information processing capabilities of billions of under-utilized brains.  Consider crowdsourcing, an already popular way to submit a problem or task to anyone “out there” willing to tackle it, for fun or payment.  Consider innovative Internet-based “games” like Foldit and Eterna that tap into the problem solving capabilities of volunteers to assist with significant scientific challenges.  Consider micro-payment schemes that allow users to bank and spend using their cellular phones.  The new answer to poverty alleviation just might be clever ways to “outsource” brainwork to the bottom billion.

Social entrepreneurs, start thinking!

Sources: IBM, GlobalIssues.org, ITU

W

In the United States, over half of our sewage sludge is either composted or pelletized and then applied to our national farmlands.[1] This closed cycle is much to be desired, once concerns about heavy metal, pharmaceutical and other chemical residuals are properly addressed.  Other choices for disposal include landfills, land reclamation, or incineration.

Incineration utilizes large quantities of natural gas to burn the sludge.  Essentially 100% of the carbon contained in the organics is released as CO2 into the atmosphere.  Because this carbon is biogenic in origin, it is not counted as human-caused GHG emissions.  The substantial CO2 emissions from the natural gas used to incinerate the sludge, however, do contribute to increased GHG concentrations in the atmosphere.

What remains after incineration is a quantity of ash, which contains all the non-combustible elements of the sludge.  Most of this is inert silicates and other elements that help make up the bodies of plants and animals.   But trace heavy metals will be present as well, often in concentrations that make the ash hazardous material that must be disposed of properly in a landfill.  If concentrations are lower, the ash may be used in the production of concrete or other permanent materials.

From the point of view of removing potential toxins from the environment, incineration is a very effective technology – presuming proper incineration where only low levels of toxins are released in the combustion smokestack emissions.  From ecosystem and econosystem perspectives, however, much value is lost in incineration.  Rather than return nutrients and essential trace minerals to the soil, we break the cycle and sequester them.   Our farmlands are supplemented instead with fossil-fuel manufactured fertilizers, and are gradually leached of the trace elements necessary for healthy plants and nutritious food.   We are using fossil fuels to incinerate our biosolids, and then using more fossil fuels to make fertilizer.   This is not a sustainable solution.

Dumping sewage sludge into a landfill also breaks the natural biological cycle and sequesters the organic and inorganic elements away from the ecosystem.  Decomposition of this sludge in the landfill will also generate large amounts of methane gas, much of which will escape to the atmosphere before any methane recovery system can be put into place.   The increasing expense of landfills and transportation also makes landfills a poor choice for organics disposal.

Higher population densities combined with a more environmentally aware populace has made Europe the leader in innovative methods for environmentally and economically effective organics recycling.   For several decades, European countries have been rapidly adopting variations of a technology known as “anaerobic digestion” to treat their wastewater sludge, increasingly combined with source-separated yard waste and the organic fraction of municipal solid waste[2].

Although the term “anaerobic digestion” may not be familiar to many people, all of us are intimately familiar with the process because we carry around a similar facility inside our bodies.   A wide range of bacterial microbes in the oxygen deprived (anaerobic) interior of our digestive tracts break down the complex organics of the food we eat, and feed our bodies as well as theirs with the nutrients.  They do not do a perfect job, however, and our feces still contains abundant, energy rich organic material.

A municipal anaerobic digestion facility utilizes a different set of bacterial microbes that live at much higher temperatures than those in our bodies.   Those microbes thrive on our sewage, foodwaste, compostable paper and yard trimmings, generating biogas rich in methane (natural gas), as well as an end product of high-value compost.

The latest generation of “dry” anaerobic digestion facilities are able to process the full range of municipal organics and are most favored for new facilities, delivering two strong benefits to the econosystem:  biogas that has value as a “green” substitute for fossil natural gas, and high quality compost that restores soil health and productivity. The relatively high temperature microbial digestion process destroys all pathogens and most complex organics.  Trace heavy metals not removed in the wastewater treatment process will remain in the finished compost, but concentrations are much lower than in the highly concentrated ash from incineration.

The EPA has set standards for heavy metals concentrations in compost, but in Europe anaerobic digestion facilities are able to meet far more stringent standards for compost from anaerobic digestion, allowing the use of anaerobic digestion compost on food crops.  Standards for copper and chromium, for example, are up to ten times more restrictive than the EPA standard.[3] Concentrations of heavy metals and toxic molecules will of course also depend on levels in the original wastewater, and testing of compost should always be performed regularly.  By Europe’s example, however, there does not seem to be a residual toxins risk that outweighs the environmental benefits of recycling our organic wastes.

Water extracted from the anaerobic digestate prior to final aerobic composting is returned to the wastewater treatment plant for settling, oxidization, and testing before being released into the natural watershed.   Again, Europe’s experience suggests that this digester effluent does not negatively affect the quality of water ultimately released to the natural watershed.

Combining yard clippings, compostable paper, and foodwaste with biosolids significantly increases biogas production and can improve the quality of finished compost as well, by improving the balance of carbon to nitrogen inside the digester.  However, some facilities allow for two simultaneous digestion processes, one with and one without sewage biosolids.   This may diminish the actual biological value of both compost products, but a “no sewage” product may have greater economic value as an “organic” compost with essentially no trace contaminants.

Advanced anaerobic digestion is the best technology available for cost-effectively and environmentally recycling municipal organic wastes back into the ecosystem and returning value to the econosystem.  It has not been deployed in the United States simply because until recently our economic calculations have not incorporated environmental costs and benefits.  When the values of green energy, GHG reductions and organics recycling are added into the equation, anaerobic digesters are the “natural” solution.

[2] http://www.calrecycle.ca.gov/Publications/Organics/2008011.pdf

[3] http://www.seas.columbia.edu/earth/vermathesis.pdf

The fundamental proposition underlying all economics is that human intelligence can direct energy and resources into products and processes that benefit individuals and society. Our basic individual and collective goals are healthy food, physical safety, family and friends, comfortable homes, good education, decent healthcare, and freedom to express ourselves – as well as a healthy ecosystem to support us. Yet these basic needs are not met for most of humanity, and they are appearing less secure than before for those of us who are more fortunate. Humanity is at a crisis of development, and that crisis is named energy.

For more than a century, fossil fuels appeared to be an infinite bounty, and their use fueled a boom in socio-economic development. We used them at an ever increasing rate to support ever growing productivity.  Now, unfortunately, we see that fossil fuels are limited after all, and further that their use is changing our ecosystem in dangerous ways. Climate change or no, it is clear that we cannot sustain the current energy consumption habits of the rich world, much less continue to develop and bring underdeveloped regions up to our rich-world standards.

If humanity had a brain – if we had a truly global society rather than a world of suspicious and antagonistic tribal nations – it would be obvious what we must do. Rather than waste resources and intelligence on war and preparation for war, we would collaborate on a massive overhaul of our buildings, transportation systems and economic infrastructure to improve energy efficiency and to shift away from burning fossil fuels. The end result of this transformation would be higher productivity, less climate change, and a greater ability to address hunger, disease, and ignorance. Poor-world regions would benefit from energy-enabled improvements in quality of life, while rich-world populations would continue to prosper.

To achieve this we would:

• Put a large and comprehensive tax on carbon emissions, while reducing income, sales and business taxes.
• Publicly finance construction of a global smart grid, and require smart grid features in appliances.
• Require energy audit and estimated energy cost disclosures for all real estate sales and rental agreements, and for all sales of energy consuming products.
• Provide public financing (primarily via energy bills associated with the building) for residential and commercial energy efficiency improvements.

With these few but transformative public policy changes, the market economy would respond by:

• Building lots of wind farms
• Building lots of natural gas electric plants
• Insulating everything, and building new buildings to be energy efficient.
• Putting solar hot water heaters on every home
• Replacing home furnaces with heat pumps
• Replacing inefficient pumps, fans, and electric motors
• Using sewage and organic wastes for energy generation
• Designing and building lots of advanced nuclear plants
• Shutting down dirty coal plants
• Building solar thermal plants in the deserts
• Switching to electric cars and GNG trucks
• Using algae to produce liquid fuels for air transport
• Building out lots of rail transportation
• Building tide and wave farms in the oceans
• Building PV farms in high-sun, high-demand areas
• Reducing agricultural use of artificial fertilizers through advanced farming techniques

If you would argue with any of these “market response” points, I ask you to put that aside for now. Perhaps “clean coal” deserves a place in the line-up and nuclear power does not, or perhaps you see a future in space-based solar collectors. That’s fine. The free market can generally be counted on to decide among competing technologies, so long as society puts a proper price on the externalities of resource depletion, pollution, and climate change risk.

If the world could put the above policies in action today, I am certain that within three decades the use of fossil fuels would drop to a fraction of current use, and petroleum in particular would be seen primarily as a long-term resource for manufacturing plastics, solvents, and other organic commodities. Some climate change will happen anyway, but we would avoid the worst scenarios. Total energy consumption in the U.S. would conceivably fall by a third or more, while worldwide consumption would likely still have to double due to “catch-up” development in Asia, Africa and elsewhere.

Unfortunately, humanity does not have a brain. Coordinated global action is a process of negotiation and consensus-building. Fortunately, leadership by example can accelerate the process dramatically. If we are honest with ourselves, we can see that the developing nations have a strong argument: the highly industrialized nations established economic leadership largely by their aggressive use of fossil fuel energy, and the “footprint” of industrialization persists as accumulated CO2 in the global atmosphere. It is therefore only just that the nations with the greatest per-capita historical footprint take the lead in cutting emissions, and then transfer our proven efficiency methods and technology to the developing world.

While many European countries and Japan have taken a social stand to be leaders by example, the United States has not. Yet the United States stands out as the nation with by far the greatest historical per-capita carbon footprint. What kind of people are we, if we will not accept any burden of conscience? Ronald Reagan famously echoed John Winthrop describing America as a shining city on a hill – and indeed the eyes of the whole world are on us – but does our city shine only by its Las Vegas lights of consumption, or does the metaphor still apply to our social conscience?

I believe that there are still leaders in this country who are guided by duty and honor more than by money. I believe that there is still a populace who cares, and that we have not irrecoverably slipped into self-centered, self-righteous greed and moral decay. I believe that we won’t wait for global consensus, nor even for Congress. I believe that leadership has already been demonstrated in towns, cities and states, and that continued leadership at these levels will shape first national policy, and then international policies.

Cities and states levy taxes. It is thus within the power of these government entities to shift taxes from productivity (income and sales) to energy consumption. It is within the power of the states and some cities to implement a regional smart grid. It is within the power of state governments at least to require energy cost disclosures on real estate sales and appliances. And it is within the power of most municipalities to provide financing for residential and some commercial energy efficiency improvements. So much of what must be done can be done at the local and state level.

Let us not whine about whether we will be somewhat disadvantaged by moving first in a direction which all must move eventually. It is better to take a small disadvantage ahead of the crowd, in order to gain the benefits of leadership. Let us not shame the faces of those that look to us or cause their prayers to be turned to curses. Let us lead.

Our obsession with GDP is killing us. What we call Gross Domestic Product is an attempt to sum all the value added, in every step of production, of every monetary good or service within our national economy.   But GDP doesn’t measure the standard of living of anybody.   And that’s where it fails us and leads us into ruin.

Year to year growth in GDP doesn’t mean year to year growth in quality of life.   If a chemical spill happens near your home, the money spent to clean it up is added to GDP.  No wealth was created — in fact harm was done — but the clean up is considered value-added while the original harm is ignored.  If a forest is cut down, the salaries paid the lumberjacks and the profits paid the shareholders are added to GDP.  Is the processed wood a greater value gain than the loss of the forest?   Perhaps, but the loss of the forest is not subtracted from GDP.  In a country where healthy, clean tap water is the norm, does $15 Billion spent each year on bottled water improve our lives?     Do the dividends paid to fast-food shareholders around the world  add wealth to our nation sufficient to offset the health care costs of obesity?

Conversely and perversely,  the endless work of a parent to nurture a child is not counted at all in GDP.  A day spent relaxing with friends in the back yard doesn’t count at all.  A week on vacation only counts for what you spend, not what you gain.  Countless hours of volunteer work do not count at all.  GDP only measures what we spend, not what value we gain.

VIDEO: Alan AtKisson Discusses the History of GDP

GDP vs. Value and Satisfaction

Price as a measure of value is highly flawed.  We are not rational beings when it comes to most economic decisions.  In most circumstances, we do not calculate value well.  We spend money foolishly more often than we spend it wisely.  If we are desperate, we will pay more than we should;  and if we feel wealthy, we will spend more than we should for some things and less than we should for others.   The poor buy lottery tickets rather than food, and the rich buy expensive watches solely to show that they are rich.  One buys false hope, and the other false status.  One moment we are vigilant savers of a dollar or two on a purchase of food, and an hour later carelessly overspend $100 on entertainment.   Many times we buy things just because other people are buying them — we follow the crowd and assume there must be value there.  If we can not be trusted to spend money wisely to obtain true value in our lives, how can the measure of GDP tell us anything about the wealth and health of society?

We all know what really matters.  A comfortable home.  Good food to eat.  Relationships.  Respect.  Meaningful work. Health.  Learning.  A little adventure.  A healthy environment around us.  A sense of security that we will have enough of all these things as we get older, and that our children will have these things too.  Does an increase in GDP give us more of these things?

In 1968, GDP per person in today’s dollars was half of what it is now.  But we are not twice as happy or twice as wealthy than my parent’s generation was then.  About 12% of people then were below the poverty level, the same as now.  Communism was feared in the way we fear terrorism, and nuclear Armageddon loomed then like climate change does now.  But they had television to marvel over as much as we marvel over the Internet, and a health system that was getting better rather than worse, and falling unemployment.  The Vietnam war was their Iraq, but the US was an ascendant manufacturing power, not one in decline.  We may have more “stuff” now, but it would be hard to make a case that we our quality of life is twice as high now as then.   So why do we look to GDP growth to tell us the “health” of the economy?

Could it even be that growth in GDP is making us poorer?  Professor Herman Daly and others in the Ecological Economics school of thought argue that case convincingly.  Daly argues that what GDP really measures is an increasing consumption rate of energy and natural resources, and that when you look at the unsustainable depletion of natural resources and the costs of pollution and climate change, we are clearly making ourselves poorer.  [See the text of Herman Daly's recent address to the US Society of Ecological Economics here].

What We Want:  A High-Satisfaction Economy

Daly and the Ecological Economics school advocate a “steady-state” economy — that is, an economy in which the total throughput of energy and natural resources is relatively steady at a level consistent with sustainability over a very long period of time.  I agree with this tenet, but argue that it is an unfortunate term.  “Steady-state” implies an unchanging state, and nobody wants that.  We all want things to “get better”.   What we want is a higher quality of life.  A better goal statement, then, is that we want a “High Satisfaction Economy”.

The question is, what policy to pursue to best enable things to get better?  Demonstrably, it is not the current policy of GDP growth:  more energy, more resource consumption, more work, more stuff, more waste, more pollution.  If what we want is a high satisfaction economy, then we should measure satisfaction, and set policy to those measurements.

Numerous alternative measures of economic development have been proposed over the past several decades to account for resource depletion, environmental degradation, and quality of life indicators (health, education, income, employment, mortality, etc.).  Although none of the proposed indicators are free of flaws, almost any of them give a better perspective on economic development and human welfare than does GDP.  An excellent historical perspective on the various governmental and non-governmental efforts to track and use alternative indicators for policy is given in Flynn,  Berry, and  Heintz; Indicators: The Journal of Social Health Vol. 1, No. 4, Fall 2002.  Yet none have been adopted by policymakers, who continue to promote development through growth as measured by GDP.  Why is that?

Consider the following from the paper cited above:

During the [Clinton administration], the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce started preliminary work on a system of satellite national accounts to show the state of the environment, beginning with non-renewable mineral resources.  The first set of Integrated Environmental and Economic Satellite (IEES) Accounts was released in 1994 and included a work plan to develop a set of prototype nonmarket accounts for subsoil assets (e.g., oil, gas, and major non-fuel minerals), renewable and other natural resources (e.g., trees, fish, and water resources), and nonmarket environmental assets (e.g., clean air and water). Concern in the U.S. Congress that the satellite accounts could somehow have negative implications for the minerals industry led to instructions that BEA desist from further activity until the need for such information and its methodology was confirmed by a study of the National Research Council of the National Academy of Sciences.  From 1994 to 1999, the Panel on Integrated Environmental and Economic Accounting performed such an examination under the direction of Yale economist William Nordhaus and 11 other social scientists.  The findings were summarized in a report entitled, Nature’s Numbers: Expanding the National Economic Accounts to Include the Environment, which urged the nation to explore alternative approaches to more fully account for the contributions made by nature to our economic well-being (1999). Despite the panel’s recommendations, the U.S. government did not authorize BEA to continue work on natural resources and environmental accounts.

A Conspiracy of Interests

What is at play here is a conspiracy not of malice, but of interests.

Politicians, in general, have four primary goals:

• to get elected and re-elected
• to gain in power and influence
• to ensure a profitable career after leaving office
• to do something to improve society (leave a legacy)

Unfortunately these goals are usually prioritized in the order given above, with the last given least attention.  Politicians, therefore, are understandably interested in promoting the interests of powerful people and institutions, so long as it is legal enough not to interfere with getting re-elected.  Politicians are understandably reluctant, in addition, to make policy recommendations that are against the interests of powerful people and institutions, knowing they will spend money to portray them as negative, hypocritical, and un-American.  Ask yourself again why Al Gore lost the election to George Bush.

The three most powerful interest groups in the economy are those of the financial, energy, and manufacturing sectors.  For each of these, the easiest path to profits has been the kind of economic growth measured by GDP.   Banks create money based on fractional reserves and lend it to industry at interest.  Industry uses the newly created money to finance the extraction of more natural resources,  including fossil fuels, to transform those resources into more goods and services, and to convince buyers that they need those new goods and service.  Speculators race to over-finance successful sectors, creating bubbles which collapse and create turmoil and financial insecurity.

Overall quality of life may go down, as discussed above, but shareholders realize a profit and executives are lavishly compensated.  Thus the apparent quality of life gets better for the elite with an increasingly unequal allocation of income, generally unrelated to value created for society.   As the overall quality of life goes down for the majority, even the rich begin to notice, and seek to get more rich in order to more effectively insulate themselves from the decline.  The most obvious path to greater riches is the same path of exploitation they have been on, and so they lobby politicians to pursue policies of more growth, using the argument that a rising tide will lift all boats.  Unfortunately, the majority of people in the world don’t have boats.

Towards a High-Satisfaction Economy

If we want a high-satisfaction economy, then we need to measure satisfaction so that we can evaluate policies designed to promote it.  And we have to realize that until the most politically powerful constituencies want a high-satisfaction economy, it’s not going to happen.  Fortunately, that opportunity exists right now.  Sufficient numbers of rich, powerful people are recognizing that our planet and species is in crisis, and that insulating themselves from it isn’t the most adaptive strategy.   Common wisdom is that Obama was elected on a groundswell of popular discontent — and I think that is true — but I also think Obama would not have succeeded if the more powerful interest groups were united against him.

The financial industry is in disarray at the moment, and may be ready to accept a new model of more prudent monetary policy.  Manufacturers are squeezed between high commodity prices and falling consumer demand and are looking for efficiency and opportunity where ever they can find it.  Even the energy sector is split, with entrenched fossil fuel interests pitted against renewable energy opportunists.  Politicians have an opening, right now, to leave a legacy by initiating dramatic changes in the failing status quo.

Now is the time for a push towards sustainability and satisfaction by a widespread, popular demand for a revision of national accounting practices and the adoption of new indicies that measure environmental health and overall quality of life.  With the new measurements, new policies can be put in place to enhance quality of life more directly, rather than hoping that growth in GDP will “trickle down” to personal satisfaction for the citizenry.

What You Can Do

Pass along these ideas, and call or write your representatives.  Whenever they ask for money, tell them to start measuring and working towards quality of life for their constituency, and set aside blind faith in GDP growth.   Climate change, healthcare, poverty, national security — all these things are dependent on a new system of accounting that measures what we value, not what we spend.