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Created: Feb 11, 2008
Updated: Jul 28, 2010
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From credit crunch to planet crunch - or revival?
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How to quickly take care of waste, toxics, pollution, loss of resources, loss of nature, climate change AND run a vigorous economic revival. Paper and slides for the Middle East Waste Summit, May 26th-28th 2009.
Abstract: This is crunch time. The experiment with endless economic and ecological debt is ending in a ‘planet crunch’ of multiple converging shocks that threaten everyone. There have been decades of warnings so what went wrong? A global society of generally well-meaning and intelligent individuals has collectively not made a meaningful or intelligent response. As with the credit crunch, colossal accumulative risks are not prevented. Our minds trick us into trying to solve the planet crunch with the same thinking that caused it. Problems that are divided up to suit society’s specialisms may appear more manageable yet if the problems are actually indivisibly joined-up then joined-up thinking and joined-up solutions are required. Systemic global problems require systemic global solutions designed with creativity and engagement rather than by reinforcing predetermined ‘right answers’.
Planning to make global problems less bad has allowed them to worsen. Proposals for constraints (such as ending economic growth) and caps (such as limiting resource use and emissions) are proliferating. Yet global problems must be reversed, not just slowed, and the market mechanisms that cause them must be adjusted to do this, not shackled with centrally-planned restrictions. Recent research in the NATO Science Programme shows how systems thinking can be used to design systemic tools to make adjustments that match the scale and urgency of the problems. One proposed economic tool, ‘precycling insurance’, uses waste as a leverage point for a global revival of lasting wealth, stable productive ecosystems and co-operative societies. This tool provides an efficient growth-friendly market mechanism to swap the unaffordable worsening of planet crunch problems for affordable activities to reverse those problems. Today’s resources-to-waste ‘linear economy’ can be switched to a resources-to-resources ‘circular economy’ in just a few years. Global self-destruction can be switched to global regeneration and revival.
Keywords: credit crunch, planet crunch, silo thinking, systems thinking, waste, climate change, externalities, precycling insurance, circular economy, economic growth, revival.
Click on 'files & photos' above to download 100k paper and 3.5Mb slides pdfs.
Please comment below or directly to James Greyson ('blindspotter' on wiserearth) - thanks!
Comments (1 - 20 of 27)
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hmmm .... do we have the stuff here for a topic on WiserU?
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I'm glad to see such deliberate discussions here. Well done!
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Good on you Frank! Yes there is unfamiliarity about using insurance in different ways which can make it seem a bit odd. This seems to be due to a decades long assumption among policy-makers that regulatory limits, taxes and bans are the available toolkit. Policy-makers have never ruled out insurance, they just haven't generally given it any thought. The exceptions are interesting. Third party liability insurance (such as on cars) is a good parallel for an obligatory insurance in the public interest. So called 'national insurance' (actually a tax) helps with the (suddenly looming) risk of nations being financially wiped out. Recycling insurance in the EU WEEE Directive is used to pay the future costs of getting things right whilst creating a current incentive for producers and buyers to choose more wisely. And as we discussed, insurance has a history of being used to prevent losses not just try to pay for them. Even today when you upgrade the security in your house or car you get the incentive of lower premiums, just as precycling premiums would respond to cutting waste-risk. So I could have called it something else, but maybe then someone would pop up on this page and ask why didn't I call it insurance? Perhaps if humanity toggles the 'self-destruct' switch back to the off position and such tools are used, it will be called something else. I'd be so happy about a chance for the planet that I wouldn't mind what anything was called. |
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I read it and also took in the PowerPoint.
The core of you argument I agree with, 9.1 Precyling insurance could correct much of the faulty pattern of incentives that is causing the plant crunch. All market participants (such as buyers, sellers, investors and government) would adapt their decisions to the corrected incentives. There would be no need to persuade people to 'do their bit' or 'do the right thing' since the incentives would speak louder than any campaign. I totally agree. I wonder about the insurance frame. |
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Hi Frank, it would be obligatory. Check out the paper and see if it makes sense? Meanwhile let's hope the mess puts out the fire, or the fire burns a mess maker, or I get smarter at following abstract reasoning? Cheers, James |
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So let me see if I get it. Like fire ‘insurance’ as originally defined it was a protective pool of money that people saw as a solution to the threat of fire. So they came together around the idea of creating a fire fighting organization. The underlying motive was to reduce risk by paying out a little up front to prevent a big payout in the future.
So here’s where I begin to get confused. I don’t see where the payer of the precycling insurance has any benefit. Why would a guy pay to insure his own pollution or ‘mess making’? Or put another way, why would fire be willing to pay for people putting it out? It’s of no benefit to fire to be put out. I know that sounds strange, but if I were fire I would be working my tail off to stop that idea because there’s no benefit for fire. I guess I don’t understand. If I were to think how to stop fire, I would figure out how it gets started and try my best to find the funds to pay for stopping as much fire as I could. So my next problem is to find those funds. And that’s what I guess took place in London; it became a benefit sell to the people that needed the protection. Fire had no part in paying for the defense of stopping fire. I don’t know if that makes any since, but I hope it does. So in the case of this precycling insurance idea, who would pay up to stop the mess makers? Substituting mess makers for fire would it run like this? If I were to think how to stop mess makers, I would figure out how it gets started and try my best to find the funds to pay for stopping as much mess making as I could. So my next problem is to find those funds. So does one go to the people that need to be protected from the mess makers and get them to pony up to prevent the mess makers from making messes? But mess makers are not like fire, or are they? In some ways they are, in other ways they are not. If a person starts a fire, the people go after him, but the fire has happened – not much help there, but at least the fire was stopped because of the collective action of the pool of money. But how would that work with the mess makers? Questions, questions, questions – as someone once said, “there are no solutions, only choices. |
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In this age of stupid, you're not. Good question, thanks. Yes it's not quite insurance as we know it but there are reasons to do it differently, mainly that it's cheaper to prevent the planet crunch than to suffer and hope in vain to pay for it. There would be a collective pool to pay for prevention, which means world-wide engagement with sustainable development (for the detail please see Systemic Economic Instruments for Energy, Climate and Global Security ). When the practice of insurance first began in London in 1680 there were no pay-outs for claims, just funding for fire brigades that prevented more losses. Insurers could be regular, co-operatives, mutuals or even NGO's who know this game better than most insurers, so we could see for-profit and non-profit competing. Significant producers would be obliged to insure against the risk of their product adding to waste levels in ecosystems. This is no harder to calculate than any existing insurance but the power is that it can work across all kinds of products (from chemicals to fuels to skyscrapers), all sectors of the economy and pretty much all unsustainability issues. The premiums would support the very broad scope of waste prevention (including for example the reversal of global loss of nature) and create a global market without the rather big flaw of investing in its own destruction. If you've had a chance to see the paper (From credit crunch to planet crunch - or revival?) you'll have seen this would implement a 'circular economy' incredibly fast. Turning the market on its head in this way would mean there would no longer be any reason to oppose economic growth (which would be measuring acceleration towards sustainability) and no longer any reason for business and government to oppose going 'green' or reversing climate change for fear of impacts on profits and growth. |
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I like the idea of turning the ‘market’ on its head; the ‘insurance’ idea really intrigues me. The idea of precycling insurance is something I’ve been trying to get my lam brain around.
I’m about to show my stupidity – isn’t insurance based upon a collective pool and then that pool is invested to pay of claims and also make a profit? How would a precycling pool be created, who would buy the insurance and who would be the insurer? Is this what is being proposed? If not what is? Like I said, I'm showing my stupidity here. |
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Thanks Mario, I guess there are two groups to persuade (although they often act as one!); government and the super-wealthy. Government should be relatively easy since my paper gives them the economic tool to achieve future growth - something they cannot get otherwise. Anyone can help by talking and writing about this. The main obstacle seems to be that political attention is typically otherwise engaged, but keep trying and let me know how you get on. The other group, the super-wealthy, is more tricky since as you say they won the game of exploitive linear economics. Here it helps to reveal the planet crunch as many converging global scale shocks that sooner or later will obliterate all forms of personal and corporate wealth. In a crunched world we should expect to lose everything we value and those who have the most, have the most to lose. So shared wealth might be more attractive than no wealth. These are intelligent people and not all in denial. Why would they not welcome an opportunity for a change to a system where continuing wealth creation (and a decent life for their kids) is possible? I bet many would even be willing to club together and have a quiet word with the handful of people who could make circular economics happen globally. I'd be glad to hear of other thoughts on this key challenge. |
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Great idea James! Circular economy is like a perpetual machine since it is mimicing an eco-system. One example is the ''algae cycle'' continium where photosynthesis with light and CO2 is producing both energy products Linear economy is the culprit because from a point A they have been transfering all the wealth/energy to point Z and didn't allow any give and take. It is a selfish system that chokes the free market. Circular motion though transfer activities from A to z to A continuously. The challenge is how to persuate the ''linear economy'' winners to start the game with the new rules of the circular economy?
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Many thanks guys - very generous of you and really encouraging for me.
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I have had time to dwell with this and incorporate it into a world view, and I am inspired and relieved that someone is on the case for true "order of the household(s)". Now the idea needs to move into reality, for it is always later than we think...
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An inspiring resource that encompasses waste issues and so much more. My thanks to James for another good 'un!
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Hi Fred, the paper for MEWS is a good start (see files and photos tab above) though if you'd like more of the nuts and bolts there is also last year's paper Systemic Economic Instruments for Energy, Climate and Global Security
You may know that the idea of precycling fired up in California more than 20 years ago. Precycling insurance is an extension of the EU WEEE Directive's recycling insurance designed to promote C2C into a global economic and ecological recovery tool. Would be glad to hear your impressions and ideas about it. James |
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I'd like to know more about 'precycling insurance' - where can I find information on this?
Thanks |
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@Phil (philralph): Yup, no easy way to fork out a discussion unfortunately. What you can do is to create a new discussion topic in WiserEarth UK group for that both you and Louis (bohemiantriumph). You're both group members so that would work. Or, you can append it to existing topic about group purpose.
It seems there's a need for either threaded discussions or discussion forum (so there can be multiple discussion topics) for each page on WE? But this is something more fitting for WiserEarth Suggestions group. Feel free to drop by there with feedback/suggestions. |
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Phil, I'm not fussy about what anyone says here. If it helps there is some chat about meetings here, http://www.wiserearth.org/event/view/07e791c954bc8d69c15b3ad3e35fe23c Wise comments about connectedness - your yearning for more and better connectedness is an expression of your humanity, not futile so hang in there. My paper tries to hint at the scale of ambition that's needed and the scale of opportunity available. Louis, I have only a basic degree too (in engineering) but I've been fortunate that the professors in my European networks tolerate and encourage me. Nature is a great guide for systems design - my paper shows how to bring a basic principle of nature 'everything is food - no waste' into the human world. MPs can be heard now excusing their greed by saying 'it's the system' so you're right to be sceptical of systems that are mechanistic and self-serving. For a lighter account of the kinds of systems design stuff I do, see what you think of this small piece I did for the UN last year, on pages 5, 6 at http://amr.stakeholderforum.org/fileadmin/files/AMR_2008/AMR-Outreach-080703.pdf Wiserearth is a happy home for people's ideas and efforts so it would be great to see your 'few ideas within your little bits' pop up as a resource for one or more groups. |
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James. Thanks for your response. I did "go off on one" a bit. I just started and it happened, quite reactively. Thanks for your openness. I appreciate it. I suppose I am such a long way from academic training - I graduated in 1971 and was never very disciplined academically - which is why I read/trained in Speech, Drama & Literature. When I read something that comes from an analytical viewpoint I find myself wanting to apply it practically, to see examples, to find analogies. I had to take 'O' Level maths twice! My analytical processes have been moulded by a life of what used to be called 'mysticism' - when I encounter an idea I have to relate it to the natural world. That is my filter, my bias. Simple example of why I always question systems: There is a forecast for possible snow. The risk factor from the met office is not high enough, when taken together with local indicators, to trigger the system that has been devised to decide whether gritting of main roads is necessary. No gritting is done. The snowfall exceeds meteorological expectations and large swathes of the country are disabled, trapping hundreds of people in their cars on the motorways overnight. Next day on the news the government minister responsible says the magic words "We do have systems in place, but on this occasion they failed because of unforeseen factors". Had Bert rung up Fred, his supervisor, that night and said - I think it's going to snow heavier than they said, my knee is hurting - shall I get the lads out gritting tonight?".... There are many more serious failings as in the care of at risk children or vulnerable elderly. These are clearly badly designed, not thought through, systems, or systems hampered by regulations or poor inter-agency communication. I do not have the answers. Maybe systems people like yourself will be able to re-design our economies according to a better set of values. I hope so. I have an overriding belief that the human will face the challenges of peak oil, climate change and food security - I jus do not know how the whole job will be done. I just have a few ideas within my little bits. I would be interested to read a lay-person's account of the practical applications of the kind of sustainable systems design you have written about. |
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Hi Philralph. I am not sure if this is off topic either, so I will answer it anyway. There is absolutely no wish in me to proscribe any kind of connection. I was reading behind the lines of recent efforts I have seen to meet up in Bristol, and possibly I have projected an aspect of my psychology onto the attempts. Something in me was envisioning attempts to control spontaneous arisings, to "shape the spring" to "direct the immune response" - not as a "NO" or a disagreement - but as a mindfulness. It arose in me as a factor to keep in mind in the context of systems design. I might have said "If we are all cells in a natural immune response, in fact if we are the planet's feelgood connective factor, not just for illness but to boost well-being and richness, thenj let us ensure we do not block natural processes, so let us be mindful of the reasons why we do anything." This gets a bit difficult to express as it comes out of quite an esoteric appreciation of the part the human has to play in universal processes, and a healer's perspective on what the immune system is for when the body is well. Shorthand: Immune system deals with invasion, but it also deals with re-balancing and connection. As an analogy one could say that "saviours" and the like are squeezed out by the planet's need within a universal immune system reacting to a decay in human process. Sorry if that's too weird, but it's genuinely how this weird guy thinks. If I were able, I would come to the meeting in Bristol and I would be glad to meet with anyone who is part of the Blessed Unrest. |
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Thanks Christopher, you might also enjoy the 5th switch in my current work Seven Policy Switches for Global Security, which is about upgrading modern understanding of land ownership with indigenous views about belonging and guardianship. It would be fun to have your ratings for these works if you can please, which helps others to find them.
Thanks Deborah, what is WiserU? I'd love others to get access to this stuff, since very few people know how simply and quickly the economy could be adapted to get a recovery of resources, jobs, ecosystems and climate. Circular economics is particularly relevant since waste and climate cannot be resolved by any of the current attempts to set limits on linear (waste-making) economics. The public and policy-makers need to know what's possible before they can make it happen.
James