In college, I studied economics and environmental science and policy. The two disciplines are very rarely harmonized, and people who think seriously about sustainability from an ecological perspective have been able to challenge a lot of assumptions core to economic modeling. When we consider the global ecological system, we are forced to account for behaviors, constraints, and outcomes that are generally ruled out-of-bounds for the purpose of economic decision making - for example, performing cost-benefit calculations and making rational choices where the consequence must be spread over long time horizons, recognizing and valuing all externalities in a system, creating an accounting system for resources, like air and water, than aren't traditionally paid for with money, but which are fundamental to all economic transactions, understanding scarcity in situations like extinction, and so on.
For all the challenges that environmental thinking can pose to economics, a key vexing question that economics posed to ecological systems was the ability of the market, through demand, competitive advantage, and ultimately price, to foster technology innovations that would, at the right time and over time, allow us to address environmental problems through technological solutions. A key example of this has always been in energy, where one line of thinking projects that, as soon as the market conditions exist that make innovation in alternative energy feasible, that market need will be filled. And perhaps we are seeing the beginnings of such a set of innovations in green energy today.
A recent Slate.com article got me thinking again about this issue:
In an act of macroeconomic karma, materials thrown out by Americans—broken-down auto bodies, old screws and nails, paper—accounted for $6.7 billion in exports to China in 2006, second only to aerospace products. Junkyards may conjure up images of Fred Sanford's ratty collection of castoffs. But these days, scrap dealers are part of a $65 billion industry that employs 50,000 people, who together constitute a significant arc of a virtuous circle. The demand of China's factory bosses for junk—which they recycle to make all the junk Americans buy from China—creates jobs, tamps down the growth of the trade deficit, and might help save the planet.Is it possible that one nation's folly in managing resources can be another nation's opportunity, and that on a global scale, the market will be efficient in distributing resources (and managing the impact on those natural resources need to sustain economies and fuel innovation?) It seems folly to blindly say yes, although I believe many business decision makers believe this to be true, if not in this exact framing, then as evidenced by the way they behave.
Where this strikes me as folly is that it fails to create the right incentives, culture, or organization (switching from economics to business) to address more efficient use of resources. It puts us in the wishful position of hoping that the market will create conditions to clean up its mess, rather than avoiding the mess in the first place. Put another way, it puts the burden of sustainability on policy makers, influencing the outcomes of a business system, rather then as a design challenge, influencing the initial objectives and processes of the system.
It is as a design challenge that sustainability becomes a truly influential idea for business and the economy, and while I'd like to return in further detail to this topic, I will leave off by highly recommending you watch the Bill McDonough video hosted on the TED site, above, as well as reading a bit about McDonough's Cradle 2 Cradle design philosophy - which can be consumed as a very interesting book (in both the intellectual and physical sense, the book itself having been designed according to the Cradle 2 Cradle principles), as well as on many websites, including McDonough's own website.