Innovation and Collaboration: What the world needs now

Posted on May 18, 2012 by David Schwerin

Responding to today’s challenges will require the cooperation of individuals and groups representing diverse backgrounds and cultures: industry leaders, government officials, non-governmental organizations, academics and visionaries.

In conjunction with my good friend, Zhihe Wang, I recently had the opportunity to organize a meeting representing a reasonable approximation of just such a microcosm. Executives from The Dow Chemical Company, the director of land conservation for the Pennsylvania chapter of The Nature Conservancy, 15 professors and business executives from China and yours truly gathered together to listen to presentations on innovation and collaboration and to learn from each other.

The Chinese delegation included distinguished professors from the Central Party School (the picture at right was taken in 2001 when I spoke there) – an educational institution where senior Chinese officials debate and form policies that address China’s most pressing issues. Professor Jianjun Zhao is director of the Green Development and Innovation Program at the Central Party School and has a government grant to publish a series of books on “Green Companies.” A prime reason for his trip to the U.S. was to learn how other organizations are dealing with sustainability challenges. Cu Cao, President of Dandong Orient Mechanical & Electrical Integration Company shared with the group some of the benefits his company has derived by emphasizing socially responsible business practices.

Catherine T. Hunt, Ph.D., R&D Director, Sustainable Technologies & Innovation Sourcing for Dow Chemical spoke about breakthrough products Dow has brought to market or is working to commercialize in the next few years. These include solar shingles that will make sun power accessible for most households, next generation battery technology for hybrid and electric vehicles, high-performance epoxies that help create lighter, stronger blades for generating wind power and advanced filtration systems for water purification. Dow, which generously hosted the meeting, has a website featuring a home, built in conjunction with Cobblestone Homes, which uses many energy-efficient materials and technologies to supply all of the home’s electricity needs. The home is priced at the average cost for a new home in the United States.

Josh Parrish, from the global environmental NGO The Nature Conservancy (TNC), spoke about how TNC has successfully partnered with corporations and governments around the world to protect ecosystems and cooperate on a range of sustainability issues. Their collaboration with Dow has, perhaps, the most far reaching implications. The partnership is focused on helping identify, value and measure the ecosystem’s contribution to organizations and communities around the world. Most people recognize that nature’s services are essential and quite fragile. This is especially true when the environment is degraded and its resources – fresh water, clean air, flood protection – become vulnerable. This cooperative effort to quantify the extent to which companies rely on and impact nature will help Dow executives incorporate ecosystem effects into their business plans, decisions and strategies. Tools, models and organizational experiences will be publicly shared, resulting in improved business practices and increased opportunities for sound conservation investments.

I came away from the meeting optimistic that our problems can be solved by bringing together diverse groups of people intent on sharing their successes, learning from their mistakes and making the changes required to achieve sustainable prosperity. As world-famous anthropologist, Margaret Mead wrote, “A small group of thoughtful people could change the world. Indeed, it’s the only thing that ever has.”

 

 

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Economic Growth: Cure-All or Curse

Posted on April 27, 2012 by David Schwerin

Most business and political leaders are on one side; they believe unrestrained economic growth is the answer to all society’s ills: unemployment, deficits, wars etc. Those with an equally shrill opposing position include many environmentalists and academics. They believe our natural resources are being irresponsibly depleted and the environment gravely polluted by selfish, short-sighted economic policies. Where is the truth?

Somewhere between these extreme positions is a third option – sustainable growth. This middle path is one that conserves natural resources and prioritizes the environment thereby ensuring the economy has adequate resources to grow and the ecosystem maintains its vitality. Sustainable growth can be achieved by reducing the enormous waste and inefficiencies found throughout the global economy. Here are a few examples of how and where resources can be conserved and efficiencies increased.

First, a conservation- rather than a consumption-mentality needs to be cultivated. One of the ways to move in this direction is to apply full-cost pricing to natural resources and the products produced from them. Water is a prime example of a commodity that is actually subsidized in many communities and whose value is consistently underestimated. Underpricing the cost of collecting, processing, distributing and replacing water encourages wasteful water management in agriculture, in business and in the home. Charging the true cost does raise prices but the resulting cost increase would dampen demand and encourage conservation – something that must be done sooner or later. Giving consumers a strong financial incentive to install water saving devices in toilets, showers, laundry machines and dishwashers could cut water usage in half. Water saving opportunities in business and agriculture are even more substantial.

A second area requiring significant behavior modification is in waste accumulation and disposal. The developed world has become a “throw-away” society. We have to become more sensitive to the value of “obsolete” products and find creative ways to reuse, renew and recycle unwanted items. A fee or tax on the amount of trash thrown away and incentives for recycling have helped many communities reduce the waste collected and put in landfills, where space is diminishing and toxins are accumulating. Businesses should use a cradle-to-cradle pricing model so that the cost of eventual disposal is included in the price to the consumer. Why should those who are not using a product have to pay for its disposal? Ultimately, we should encourage industry to design products so that when no longer needed they either decompose and become food for plants and animals or nutrients for soil or are returned to industrial cycles to supply raw material for new products.

Making products more efficient is a third area ripe for improvement. By some estimates, over 50% of all energy is wasted. An incandescent bulb, for example, produces as little as 5% of the energy it uses. Buildings are also highly inefficient users of energy, even though we know how to construct them so that they produce more energy than they consume and purify their own waste water. Our transportation networks are just starting to get a major overhaul so they become more energy efficient. Many of these ideas require an upfront investment; where will the money come from? It is time we diverted some of the vast sums wasted on defense and homeland security to these more productive and life enhancing uses. As Barron’s, the conservative financial magazine, editorializes, “Congress, the Pentagon, and the defense industry have combined to create more defense than there is threat.”

The above suggestions just scratch the surface of possible places we can reduce consumption and waste and improve efficiencies so our economy and ecology can both flourish. Perhaps it is overly optimistic to think people are ready to make the changes needed. As Harden Tibbs, a visionary and CEO of Synthesys Strategic Consulting stated, “There’s also probably a certain degree of cultural and spiritual evolution that has to happen first in order for us to get to the point where we can actually establish sustainable technologies all over the planet.”

A bit more optimistic tone is reflected in a New York Times article entitled, “Young People Tire of Old Economic Models.” Take a look and let me know what you think.

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“It doesn’t make any sense” III

Posted on March 30, 2012 by David Schwerin

Ethanol subsidies, first introduced in 1978 and expanded by Congress many times since, is one of the most egregious examples of ill-conceived government policy one can find. These subsidies have inflated food prices, undercut the competitiveness of U.S. cattle, hog and poultry producers and induced land-use practices that boost greenhouse gas emissions. In addition, the resulting water- and fertilizer-intensive corn production has expanded aquatic “dead zones” in the Gulf of Mexico and Chesapeake Bay.

Beginning in 2012, Congress finally let the subsidies lapse, but corn farmers are still riding high on the hog and laughing all the way to the bank. It turns out that the Renewable Fuel Standard established under President George H. W. Bush mandated a guaranteed market for ethanol producers. Under the Energy Independence Act (EISA), sales of renewable fuels are mandated to increase from 9 billion gallons in 2008 to 36 billion in 2022. The act defines how much ethanol must be included in all the gasoline produced in the U.S. and it increases each year until 2022. Specifically, the EPA determines the amount of ethanol every major U.S. gasoline distributor must blend into its gasoline, and there are significant financial penalties if the quotas aren’t met.

The ethanol directive diverts massive quantities of corn from food to fuel production; the law requires that 37% of the 2011-12 corn crop be converted to ethanol and blended with gasoline. The result is higher than normal corn prices and handsome profits for corn farmers. Ethanol contains one-third less energy by volume than regular gasoline and, according to the American Automobile Association, the mpg-adjusted price of the ethanol blend is higher than regular, premium and diesel gasoline.

The rationale behind support for ethanol blended gasoline – besides obvious benefits to the politicians representing the corn belt – is that it releases less CO2 into the atmosphere and is, therefore, a greener alternative. But numerous studies refute this premise; when all factors are taken into consideration, it becomes clear that ethanol does not reduce greenhouse gas emissions. Often overlooked, for example, is the carbon released into the atmosphere when the soil is prepared for planting. Another factor that must be considered is that an acre of corn diverted to fuel production in the U.S. is likely to cause farmers in other parts of the world to clear an equivalent acre of forest to replace the food production lost from American farmers’ planting decisions. The Nature Conservancy did a comprehensive study on the amount of land that will be needed by 2030 for new biofuel development. Terming this measure “energy sprawl,” they wanted to see how expanded energy-related land use would adversely affect habitat and wildlife. They found that the biggest culprit, as shown on the accompanying chart, was biofuel production. Given all the negative consequences of expanding biofuel use, mandating the use of ethanol doesn’t make any sense. After all, if ethanol was such a great deal, there wouldn’t have to be a law to make people buy it.

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“It doesn’t make any sense” II

Posted on March 1, 2012 by David Schwerin

The world population rose from 1.6 billion in 1900 to 7 billion in October 2011, and the U.N. projects that it will reach 9.3 billion by 2050. Achieving agreement on the “right” number of people may be impossible, but it’s hard to deny that most of the great challenges the planet faces – global warming; loss of biodiversity; dwindling energy, food and water supplies; brain drain migration and commercial development encroaching on natural habitat – can be traced, in large degree, to the enormous growth in population over the past century. Even cross-border skirmishes and wars can be tied, directly or indirectly, to rampant population growth in a particular region or country.

There was a time, in agrarian societies and the beginning of the industrial age, when large families made good economic sense. Today, research shows that large families are often a financial handicap and tend to inhibit children’s educational opportunities. Additional siblings dilute parental resources by hampering the ability to attend to the emotional and character-building needs of many children. In our ultra-competitive information age, increasing the intellectual capital of children is usually what separates the economically successful, well-adjusted offspring from those that are a financial or social strain on society.

It is estimated that more than two in five pregnancies worldwide are unintended and half or more of the resulting births fuel faster population growth. Robert Engelman, Executive Director of the Worldwatch Institute, an environmental research organization based in Washington DC, has calculated that if all women had adequate information and the capacity to decide for themselves when to become pregnant, average global childbearing would fall below the replacement value of slightly more than two children per woman. Under these circumstances population growth could peak and reverse before 2050. It is both proper and increasingly necessary that women make their own decisions about childbearing without coercion or pressure from partners, family or society.

Despite the above arguments for discouraging large families (or at least not encouraging them), the U.S. continues its long-held policy of providing financial incentives to parents with large families. Rewards include tax credits for additional children, child care tax deductions and generous family leave policies. These are policies that don’t make any sense!

Moreover, the U.S. population, unlike that of many other developed countries, is still growing relatively quickly. In the past decade the population of the U.S. grew 9.7% compared to France and England which grew at roughly 5 percent, Japan which was largely unchanged and Germany where the population declined. While the rate of growth in the U.S. slowed since 2000, this deceleration was due, at least in part, to the economic meltdown in 2008 which brought U.S. births and illegal immigration to a near standstill compared with previous years. Thus the recent slowing trend is likely to be short-lived. As Mark Mather, an executive of the Population Reference Bureau, a Washington firm that analyzes census data, notes, “We have a youthful population that will create population momentum through a large number of births, relative to deaths, for years to come.”

It is time for an honest, open discussion where old beliefs and ineffective policies give way to focusing on the best way to achieve an equitable, sustainable prosperity. If that can be done, it seems reasonable to expect that quality rather than quantity will be seen as the superior choice and policies will be aligned accordingly.

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“It doesn’t make any sense”

Posted on February 17, 2012 by David Schwerin

In his 2012 State of the Union speech, President Obama used the phrase, “it doesn’t make any sense,” a number of times to describe current policies he believes are wrong or ineffective. His examples ranged from giving tax breaks to companies that move jobs and profits overseas to subsidizing oil companies when the industry has seldom been more profitable and the country needs tax revenue to cut its burgeoning deficit. Many of our beliefs, policies and practices no longer make any sense but we continue to hold on to them. WAT’s next several posts will be focused on several issues that cry out for change. Einstein was clearly right when he defined insanity as “doing the same thing over and over again and expecting different results.”

First issue – Prison reform

According to a recent article in the Atlantic Magazine, one year at Princeton University costs $37,000 while one year at a New Jersey state prison costs $44,000. America has the world’s highest incarceration rate by population but is only 6th when it comes to college degrees. The prison population in the U.S. has doubled over the last 10 years but 43 percent of those released from prison are back in jail within three years. Something is terribly wrong! Often prisoners, particularly those convicted of non-violent crimes are incarcerated just long enough to come under the influence of hardened criminals – often with devastating personal and societal results. Diverting non-violent offenders to community programs and treatment centers – treating drug addiction as a disease rather than criminal behavior – significantly reduces costs. More importantly, families can remain together so spouses and children have a better chance for a productive life. Another problem is that sentences for some crimes, such as the possession of 3 grams of cocaine, vary dramatically from state to state: 20 years in Indiana versus 2 years in Texas. Despite significant recent prison reforms in Texas, their penal code is far from perfect; do we really need to arrest citizens for overdue library books?

Most people understand the financial and/or humanitarian need to change the way we treat non-violent crimes. Can a case be made that sentences for violent crimes, particularly those that result in the death penalty, also need to be altered? While approximately 60% of Americans support capital punishment, there is a convincing case to be made for change. In the California prison system, perhaps the nation’s least efficient and costliest, it takes an average of 20 years to move a prisoner from conviction to execution. Since 1978 California taxpayers spent over $4 billion on housing, health care and immense legal costs for just 13 executions. With state budgets drowning in red ink, capital punishment has become unaffordable.

But there is another, admittedly controversial, consideration involving our beliefs that needs to be examined. Victims of murder and other heinous crimes will argue that unless the perpetrator pays the ultimate price, with his or her life, justice will not be served and closure is impossible. This point of view is very understandable; painful wounds are not easily healed. But the ancient traditions of all religions and philosophies have taught that we are in no position to judge the actions of other human beings or to decide their fate. Every action has consequences – some call it karma – although those consequences may not always be obvious or timed to our satisfaction. But the scientific principle that every cause has an effect applies as much to the human sphere as it does to other realms. There is a price to pay for every harmful action; no one “gets away” with anything! Moreover, as Alan Paton, author of Cry, the Beloved Country, so profoundly said, “When a deep injury is done us, we never recover until we forgive.”

It should be clear to people of all political and philosophical beliefs that state and federal criminal justice systems are ineffective, costly, unfair and often inhumane. They don’t make any sense and they need to be changed!

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“Water, water, everywhere, nor any drop to drink”

Posted on January 31, 2012 by David Schwerin

One of the most startling things I learned on my recent trip to India was that many Indian homes have access to government-supplied water for only one hour a day.

Thus the above quote describes, in slightly exaggerated fashion, one of India’s most challenging problems. It also describes what most of the world is likely to face in coming years. The irony, in the case of India, is that water is an important presence in the life of the subcontinent. Much of the country is surrounded by water: the Bay of Bengal to the east, the Arabian Sea to the west, and the India Ocean to the south. The heavy rains of the Monsoon season have always played an important part in the lives of Indians. Rivers have a storied role in India’s culture and folklore. The Ganges, for example is considered sacred by many who believe that its waters have healing powers.

India’s Infrastructure Development Finance Co. warned, in a December 2011 report, that the country’s rising population and economic growth are straining the available supply of water. Of India’s 20 major river basins, 14 are considered water-stressed; nearly 25 percent of the country’s population lives in water-scarce areas. An average person in India uses only 14 gallons of water per day, much of it of questionable quality, while the average person in Los Angeles California uses 132 gallons a day. Increasing population, rapid urbanization and an increased focus on industrial growth will only deepen India’s water crisis; social and regional conflicts over water availability and rising environmental stress are likely to affect every aspect of Indian life. Continue reading →

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Greetings from India

Posted on January 11, 2012 by David Schwerin

Two weeks into our journey to India and I am finally getting time to jot down some initial thoughts and impressions about this amazing, complex and incredibly hard to describe country. After travelling around at a frenetic pace, we have now been in Bangalore for three days where I am presenting a paper on leadership at an international conference on The Spiritual Challenge in Management.

Mark Twain (Following the Equator) may have captured India best when he said, “So far as I am able to judge, nothing has been left undone, either by man or nature, to make India the most extraordinary country that the sun visits on his rounds. Nothing seems to have been forgotten, nothing overlooked.”

First a little background information for those unfamiliar with this ancient culture where spiritual traditions remain strong and are an essential part of everyday life for many Indians. That said, much of the country is rapidly although sometimes haltingly moving into the 21st century. India’s maze of 26 states contains virtually every kind of landscape imaginable. An abundance of mountain ranges and national parks provide myriad opportunities for eco-tourism and hiking, and its sheer size offers something for everyone. From its northernmost point on the Chinese border, India extends about 2000 miles (3200 km) to its southern tip. Continue reading →

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Let’s Talk

Posted on December 23, 2011 by David Schwerin

During the holiday season, friends and families come together to celebrate and discuss important events in their lives. These gatherings mirror society as a whole and often lead to a contentious airing of seemingly irreconcilable points of view on everything from mundane matters to subjects of great significance. People talk past each other rather than finding common ground where compromise becomes possible.

As www.wideanglethinking.com has discussed in previous posts, one of the most divisive and potentially devastating issues facing humanity involves global warming.

So this may be an opportune time to share our hopes and concerns in a respectful, dispassionate manner. The Environmental Defense Fund (EDF), a respected international NGO, put together a list of ways to talk about Global Warming/Climate Change with friends and family constructively yet without ruffling feathers. While this post was intended to be used around the Thanksgiving table, it will work equally as well at this time of year. Please take a look at these suggestions and try them out. If we all tone down our rhetoric, we may gain a new perspective on this important, time-sensitive issue.

I will be leaving for India in a few days and if everything goes as planned, WAT’s next post will be from this country of ancient traditions and a modern, burgeoning economy. Please stay tuned. May you all have a healthy, growth-filled 2012.

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Time to Take Charge

Posted on December 12, 2011 by David Schwerin

Wideanglethinking.com has recently posted discussions about the U.S. budget deficit challenges. Current Federal budget policies put the U.S economy on an unsustainable path over the next decade—unless Congress and the president agree on spending cuts, tax hikes, or both. What is happening in Europe provides a clear warning about the dangers of waiting until the choices are slimmer and more draconian. The Pew Foundation has put together a well-documented, insightful exercise to illustrate many of the options currently available to reduce the debt. Take a few minutes to look at this interactive simulation; you will have an opportunity to see the difficult decisions that will be necessary in the upcoming election and beyond.

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Offensive Defense

Posted on November 25, 2011 by David Schwerin

The United States spends more on defense – 40% of the world’s yearly defense outlays – than the next seventeen nations combined. In fiscal year 2010, the U.S. defense budget accounted for about 19% of the total federal budget and 28% of estimated tax revenue.

When a country is attacked, the priority of its leaders should be to protect its citizens. But for many decades, United States military decisions have favored offensive invasions in place of defensive operations. In other words, the U.S. military has been focused on exercising power abroad rather than on self-defense. In Vietnam, Iraq and Afghanistan the U.S. embarked on military campaigns against countries that hadn’t attacked the United States. The rationale was that the world would be better off – and the U.S. more secure and influential – if certain despots or unsavory groups, living in or around these countries, were eradicated. With, perhaps, the best of intentions, the U.S. embarked on becoming the global cop. Given the urgent need to reduce its own indebtedness, the U.S. now needs to evaluate the costs and benefits of pursing its decades’ long “defense” strategy. Continue reading →

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