The World and Sustainability

(A continuation from the AERTOs BBE Forward-Looking Analysis. For background, see Bioeconomy: The Scenario Pathways)

Scenario Pathway 1: Our Common Future

20151214 Our Common Future

In this pathway, the dominant logic is that of Environmental Sustainability, meaning that sustainable handling of natural resources, protection of ecosystems, and reduction of undesirable human impact on the biosphere are the main priorities of global approaches to sustainable development.

The working green paradigm is one of Earth Systems Solutions, which means that environmental problems and the attendant solutions are put in a global systemic context. Environmental activists describe threats to the health of the planet and seek large-scale, long-term solutions based on global collective action.

In the absence of true global governance, the global politics of sustainability must therefore seek Incremental Collaboration, negotiating through existing vehicles such as the UNFCCC, WTO and other trade agreements. Complete top-down solutions remain elusive and these negotiations are more successful at generating international convergence and a cooperation between national approaches to sustainability.

Policies thus aim to create Shared Incentives, both between nations and across sectors of the economy. The emphasis is on economic instruments, especially those that put prices on environmental externalities.

In response to the search for large-scale, global solutions, the most important technological paradigm is one of Affordability and Transferrability. Technologies that can reduce environmental impact and replace fossil fuels in the greatest volumes, at the least cost, and in the most contexts globally are in demand and are the focus of research, development and innovation efforts.

Markets for these technologies deliver Price Convergence, driving the value of greenhouse gas reductions, saved water and other ’sustainability goods’ together by working at scale across borders and across sectors.

Value chain formation creates Global Efficiencies, with large companies stitching together value-add and deploying according to advantageous conditions across from multiple countries and sectors to minimize the costs and reach of sustainability-products and services.

Scenario Pathway 2: The Clean Tech Race

20151214 Clean Tech Race

In this pathway, the dominant logic is that of Competitive Innovation, as countries and global companies approach sustainable development as a challenge which will produce winners and losers, with innovative capacity the determining factor.

The working green paradigm is one of Clean Tech and Leapfrog, as novel technological and social innovations are seen as the key to addressing environmental problems while creating win-win situations for business and the economy. Action on the environment is viewed as modernizing and countries see themselves in a ’race’ to develop green solutions.

In this competitive environment, the global politics of sustainability are focused less on common benefits and more on securing Exemptions and Advantages for countries and their preferred strategies. Links and synergies between the strategies are pursued only when they are seen to generate economic or political benefits.

The resulting policies create a Tangled Web, both of trade and regulations. Market-making tools such as subsidies and preferred purchase programmes are common, and some tariffs are used defensively.

The emphasis on competitive advantage means that the technological paradigm of sustainable development is Targeted and Proprietary. Companies and research institutions seek to develop highly differentiated innovations, and to protect both the intellectual property and market positioning.

Markets for these technologies, products and services deliver Green Premia, either via the aforementioned policy instruments, first-mover advantages, or marketing and branding.

Value chain formation attempts to create and preserve High-Margin Niches. Brand and technology owners use bargaining power to capture as much of the aforementioned premium as possible. Supply chains tend to be hard to replicate and overall dissemination of a given solution tends to be less broad.

Scenario Pathway 3: Green Resource Nationalism

20151214 Green Resource Nationalism

In this pathway, the dominant logic is that of Resource Utilization, and global approaches to sustainability are built around maximizing efficiency and asset utilization, both in terms of natural resources and capital assets.

The working green paradigm is the Circular Economy, and the minimization, re-use, and valorization of waste are seen as the keys to reducing environmental footprint. Radical resource efficiency building on existing industries and technologies is seen as both green and strategic.

In this competitive environment, the global politics of sustainability see countries trying to achieve ’Sustainable Nation Status,’ with ambitious domestic strategies competing with one another for political and industrial prestige. International relations on sustainability are less collaborative and more akin to a ’Top-Runner’ arrangement.

Domestic Policies focus on Supply-side Security, with rules, trade, and subsidies promoting sustainable domestic feedstocks. Industrial policy, including targeted R&D initiatives, seeks to maximize the value of existing industrial assets and facilitate industrial symbiosis rather than looking to create new markets.

The technological paradigm most associated with this logic is that of Closed-Loop Systems. Zero-waste approaches come to dominate in process and manufacturing sectors and the system perspectives expand over time to incorporate consumers, both through advanced end-of-life recycling and upcycling and through new business models focused on function and service rather than product ownership.

For both industry and consumers, these markets are valued for their cost-certainty. Waste valorization reduces exposure to volatile feedstock and raw material prices, and an increase in leasing and subscription-based consumption gives consumers mores table expenditure over time.

Under these conditions Value chain formation produces Islands of Efficiency. Integrated companies, clusters, and even sectors of the economy pioneer specialized, deeply efficient approaches to production and consumption, but these solutions see limited dissemination globally and fail to systematically address economic and environmental externalities beyond their system boundaries.

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2 thoughts on “The World and Sustainability

  1. Pingback: About the Insight Refinery | The Insight Refinery

  2. Pingback: Bioeconomy: The Scenario Pathways | The Insight Refinery

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