flexible fees from a strategic sustainability perspective

© 2011 The Natural Step

Karl-Henrik RobèrtBlekinge Institute of Technology, Karlskrona Sweden

The Natural Step, Stockholm Sweden

September 2011

Flexible fees from a strategic sustainability perspective

Logics revolving around defined purpose


Sustainable Development - A Dynamic Challenge

Systematic decline� Forests

� Agriculture

� Fisheries

� Ground water

� Climate

� Metals

� POP’s

� Eutrophy

� Hormones

� Loss of trust

� Segregation

� Corruption

� Epidemias

� Poverty

� ...

time

The ’funnel ’of declining potential to sustain human society


Profitable Also in Loneliness

Opportunities� Resource management

� Waste management

� Tax, legislation, insurance, loans

� New markets

� Innovation/design

� Trust

� Productivity,

� Transaction costs

� Brand

� Stories of meaning

� Team building

� Community

� …

time


So, what’s the problem?


1. The power of old paradigm assumptions


...sustainable development is to fix ...costs move towards infinity so S.D social/ecological damage when the costs is to strategically eradicate the systemic for this are lower than the economic utility errors at the best prize.

...the incetives to undertake measures ...the incentives to undertake measuresare mainly based on ethics are ethical and self-beneficial

...competetive edge is lost when ...role models get competetive advantagemeasures are not launched with and create momentum for internationalinternational agreements and policies agreements and policies

Cylinder vs Funnel paradigm

It is believed that... In reality...

A Systems perspectiveAn Impact perspective


1. The power of old paradigm assumptions2. Reductionism


“Can w

e iron

out th

e gree

nhouse

effec

t?”

“Glob

al warm

ing no

t an is

sue”

“Ethano

l to the

rescue

”

“Ethan

ol cau

ses climate

distruption”

“Species extinc

tion is a natural

process”

“Mankind can not save every other beetle”

“Electric cars too expensive.”

Global warm

ing or nucle

ar winter?

“Whole list of green-house gases”

-PVC

for health

“PVC or healt

h”

Reductionismgetting lost in the leaves


Reductionism

No unifying framework


Structured overview, like in a clinical conference

Unifying framework


time

Backcasting from Principles

Principles for success

• Necessary• Enough• General• Concrete• Non-overlapping

© 2011 The Natural StepCopyright © 2004 The Natural Step

• Systematic and strict, yet open ended approach

• Trade-offs manageable

• System boundaries are set by purpose

• Resource potentials calculable

• Avoiding unknown problems

• Effective cooperation across value chains and stakeholders

• Community building

• Optimization of bottom line chances

Unique deliverables of such principles


Testning i bolag...


It was not until at least ten years later we understood how much money Electrolux had saved and earned from applying the framework to foresee changes on the market and in legislation.

“

”

Billions earned…


As we climb mount Sustainability, with the four sustainability principles at the top, we are doing better than ever on bottom line business.

This is not at the cost of social or ecological systems, but at the cost of our competitors who still haven’t got it.

“

”

Ray Andersson

President, Founder and CEO, Interface. Inc.Portland US, October 2007,

Billions earned…


Clinical conference from value chains to communities and cities…


Hu

• Ottawa

• Saskatoon

• Wolfville

• Madison

• Ashland

• Portsmouth

• Lawrence Township

• Twin Ports

• Duluth

• County of Hawaii

• ...

Hundreds of Municipalities/Cities

• Övertorneå

• Robertsfors

• Morbegno

• Valtellina

• Livigno

• Dublin

• Whistler

• North Vancouver

• Canmore

• Halifax

time


“This simple, science- and systems-based framework is the best out there. It needs to become part of a new common language, as well understood worldwide as the rules of soccer”.Ken Melamed

Mayor

Whistler, Canada


1. The power of old paradigm assumptions2. Reductionism3. Also with very clever systems thinkers and

strategic planners: pace of transition too slow*

* Learning curve, scale, market-assumptions etc.


• Asking for higher tax

• Asking for tougher legislation

• Complementary currencies (local, regional, global)

Differentiated fees...

Examples of outreach from proactive corporations – knowledge in combination with pragmatism –


• The current new-paradigm incompetence amongst our leaders implies an

unexploited competitive opportunity also within current economic system.

• However, new economic means are needed to increase pace of S.D, and to move

latecomers.

• No silver bullet, but combined with robust sustainability on the table and a balance

between magnitude and timing of prizing, flexible fees offers an elegant pragmatic

means for policy making to support strategic sustainable development.

• Flexible fees would benefit from:

(i) Further exploration of underpinning assumptions e.g. a fairer outline of green

taxes.

(ii) Exploration of other objectives than those linked to flows e.g. halting encroaching and

mismanagement of fertile land and waters, and a "humanization" of the economy.

You cannot play chess against one principle of checkmate at a time.

(iii) Exploration of the landscape for policy making, and how this could be improved for

the implementation of flexible fees.

Strategic Sustainable Development and

Flexible Fees


“Would you tell me, please, which way I ought to go from here?” asked Alice. “That depends a good deal on where you want to get to,” said the cat. “I don’t much care where,” said Alice. “Then it doesn’t matter which way you go,” said the cat.


VisionMission

Brainstorm solutionsC

Prioritization & action planning• Right direction?• Flexible?• Economic enough?

Understanding sustainabilityA

DBaseline analysisWhere are we today? What is the gap?

B

Vision within sustainability principles

The funnel

Today

Applying the Framework in four steps - ABCD planning process

Core valuesStrategic goals


Modelling… from the Globe down

into Drillholes

AAAA

BBBBCCCC

DDDD

...3i1i3i1i232ukukucuc

rw

Jrwmum −+−=

++ &&&&&& φ

Actions

B C

... ...

... ...

... ...


Forecasting: Planning from trends in rear-

view mirror, minus problems (”Cylinder

paradigm”)

•”Nothing is harmless”

•”Little harm as possible”

•”X% better than before”

•”More science needed”

”Expert-drift” and

detachment from

leadership


Backcasting: Success in whole

system through front screen (Funnel

paradigm)

• ”These are our objectives…”

• ”This is the gap…”

• ”We have done this…”

• ”We are going to do this…”

Leadership from overview (vision),

community (shepard) and support

(coach)

Begin game immidiately

Celebrate early wins

Gray areas from experience

Develop tools as needed (and ask

masters students for help)


Indicators

METAL IN TOP

SOIL(MG/KG)

WEATHERING

(W)

(KTON/YEAR)

MINING(M)

(KTON/YEAR

)

FOSSIL F(F)

(KTON/YEAR)

(M+F) / W

Al 72 000 1 100 000 18 000 34 000 0,047

Fe 26 000 390 000 540 000 34 000 1,5

Ti 2 900 44 000 2 500 1 700 0,095

Cr 54 830 3 800 34 4,6

Cu 25 380 9 000 55 24

Pb 19 290 3 300 85 12

Cd 0,35 5,3 20 3,4 4,4

Hg 0,09 1,4 5,2 10 11

(table from Azar, C., J. Holmberg and K. Lindgren. 1996. Socio-ecological indicators for sustainability. Ecological Economics 18: 89-112, listed in Course Outline: Additional Readings)


Put into Clinical Conference in International Research: Real Change

Product-Service Innovation (Sweden)

Business development (Sweden)

Industrial metal flows (Norway)

Conflict resolution (Israel)

Algae biomass (Australia)

Green Science / Chemistry (USA)

Water management (Netherlands)

Rainforest ecosystems (Brazil)

Traffic systems (Sweden)

Energy systems (Sweden)

Eco-efficiency (Finland)

Volume: from 1 to10 M USD in 3 yearsNot counting educationNot counting partners inputNew Research Alliance launched


• Purpose: To explore, test and share unifying framework.

• International NGO

• Role models

• Areas of action:– Research

– Training

– Coaching

– Advice

flexible fees from a strategic sustainability perspective

Education