Eternal optimism or blissful ignorance?

I am an eternal optimist.  I used to call myself a hopeless optimist, but being an optimist, I like to believe that there is hope for our technologically advancing society to figure out a way to survive on this planet without destroying the very thing that sustains us. 

I’ve long felt that we as a society won’t see a major shift in energy and transportation toward renewable resources until we run out of oil.  This is uncharacteristically pessimistic for me, but I haven’t seen the leadership or the motivation in our country to lead me to believe otherwise.  A March 2012 article in the Atlantic explores the magnitude of the effect rising oil prices will have on the US economy, and was particularly relevant to our discussions these past 2 weeks on the Great Recession and the financial crisis, the Federal Reserve, and finally supply and demand.  I especially liked the distinction between correlation and causation: “Rising oil prices will harm U.S. economic growth. But what is the likely magnitude? Higher oil prices have played a role in U.S. recessions since 1973. But correlation doesn't necessarily translate into causation. Causation depends on a number of factors and transmission through the economy and, most importantly, whether the Federal Reserve tightens monetary policy in response to higher oil prices. Furthermore, the impact is conditional on expectations of whether the price increase is transitory or longer lasting.”  The author does a stellar job of looking at the cause and effect: consumer shifts in discretionary spending, behavior change in response to higher gas prices, supply chains raising their prices in order to maintain profit margin and the ripple effect across multiple supply chains. 

Unfortunately, supply and demand doesn’t only function if/when the players take all of the aspects of a supply/demand curve into account.  Anyone at any point along the chain can affect the curve (positively or negatively), without consideration or even being cognizant of the remaining parts and the effects on individual parts or the system as a whole.  It is the exception for someone along that chain to consider the full life cycle impacts of a product or a process.  I’ve appreciated the simplistic introduction to supply and demand, ROI, and valuation, and I look forward to the complication of things when we add in externalities and multiple streams, but what really interested me this week was the concept of ecosystem services.  It baffles me that we don’t account for the external costs of our activities. 

The simple fact that the health of the planet’s ecosystems have been in steady decline since the mid 1980’s should be enough to spur a society to action. But we, as a collective developed society, continue to misplace “value” on such things as replacing our “old” iPhone 4S with the shiny, new iPhone 5, drive the 3 blocks to the grocery store and leave the car idling while we go inside, and measure the wealth of an individual by material goods.  The more “stuff” a person has, the better off they are. 

One phrase from the Natural Step primer really caught my attention:

“The main problem isn’t an absolute lack of resources; it is the fact that our global consumption of resources is extremely uneven and inefficient.  It may be hard to believe, but the richest 200 people in the world have a combined annual income that is greater than that of the poorest 2.5 billion people.”

I’m sorry, was that 2.5 billion people?  With a “B”?  Yep.  How can we shift the supply and demand curve, so that the rich aren’t driving the ship?  How can we give a voice to those 2.5 billion people, give them a chance at fair representation?  Can we shift how we consume along with what we consume?

Take Patagonia, for example: a hugely successful company with a respectable commitment to sustainability.  Their take on the concept of supply and demand?  The Common Threads initiative: http://www.patagonia.com/us/common-threads/. Don’t buy our products new if you don’t have to; instead, sell them on Ebay and buy someone else’s used Patagonia gear.  They received a lot of flack for that, with many believing it was one of the stupidest business moves ever.  It turned out to be brilliant.  Not only was Patagonia able to set an unprecedented example on consumption, they increased sales and likely increased brand loyalty.  Patagonia knows they make quality gear that is built to last.  They don’t design for obsolescence.   Beyond that, the company’s Footprint Chronicle’s (http://www.patagonia.com/us/footprint) outline the goal of using “transparency about our supply chain to help us reduce our adverse social and environmental impacts – and on an industrial scale. We’ve been in business long enough to know that when we can reduce or eliminate a harm, other businesses will be eager to follow suit.”   Transparency and accountability = good business. 

As long as we are stuck in a reinforcing loop of mindless consumption, we will continue down the path of eliminating our species from this great Earth.  My hope is that we will have more companies like Patagonia to set the bar and lead us down a different path.