From Stanford Social Innovation Review
John Elkington is an
optimist. In his new
book, Elkington, an
authority on corporate
responsibility
and coiner of the term “triple bottom line,”
argues that a new set of entrepreneurs in
business, government, and universities are
stepping up and taking actions that will help
us to reinvent capitalism, combat climate
change, and reduce our exposure to toxics.
Let’s start with the definition he provides
early in the book.
ZERONAUT, n. 1. An inventor, innovator, entrepreneur,
intrapreneur, investor, manager, or
educator who promotes wealth creation while
driving adverse environmental, social, and economic
impacts toward zero. 2. Someone who
finds, investigates, and develops breakthrough,
footprint-shrinking solutions for the growing
tensions between demography, consumerist
lifestyles, and sustainability. 3. Political leader
or policymaker who helps to create the regulatory
frameworks and incentives needed to drive
related “1-Earth” solutions to scale.
Although Darth Vader would not aspire
to join this club, many other people would
like to be part of the solution. In a world of
7 billion people, there are a huge number of
potential producers of game-changing ideas.
Some work on discovering medical breakthroughs,
while others focus on creating
Facebook-like Internet startup companies.
How do such ambitious, talented people
choose which hard problems to work on?
Put simply, when would the profit motive
alone—without any virtuous Zeronauts—be
sufficient to give us the “green capitalism”
that Elkington argues is on the horizon?
Consider the challenge of male baldness.
As a 46-year-old man without much hair, I
have thought about this issue. If I were the
only bald man in the world, then no for-profit
drug company would spend a cent researching
a solution to my problem. But
when millions of people have this problem,
there is huge aggregate demand and a jackpot
for the company that can develop a solution
(i.e., Rogaine). Old-fashioned capitalist
price signals direct this entrepreneurial activity.
Although some efforts will fail, some
firm will succeed, and millions of men will
smile again. This example highlights that anticipated
desperation creates a
profit opportunity and then triggers
efforts to find a solution.
So what’s the difference between
baldness cures and innovations
that enhance sustainability?
Elkington argues that status
quo capitalism lacks imagination
and ambition. Zeronauts, he
writes, “aim to get our competitive
juices fl owing with a ‘Race
to Zero’ framing of their initiatives—whether it applies to toxics, greenhouse
gases, or poverty. They start from the assumption
that there is a fundamental design
fault in capitalism—both in its prevailing
paradigm and in the linked mindsets,
behaviors, cultures, economic formulae,
business models, and technologies.”
As a University of Chicago-trained economist,
I see no “design fault” in capitalism. Instead,
I see un-priced externalities. Despite
the fact that the US House of Representatives
passed in June 2009 the American
Clean Energy and Security Act that would
have introduced incentives and regulations
for de-carbonizing the economy,
the Senate chose not to vote on
this legislation and President
Obama did not resuscitate it. In
the absence of federal legislation,
auto manufacturers and power
plants have little incentive to
economize on greenhouse gas
production. Higher fossil fuel prices
would nudge them to do so, but
the recent discovery of vast
amounts of accessible natural gas in the United
States and Canada suggests that “peak oil”
may be far away. We would not need to celebrate
the rise of the Zeronauts if the United
States had introduced carbon pricing.
Elkington is 100 percent correct to focus
on experimentation and to celebrate the
power of game-changing ideas. The Zeronauts
will succeed in achieving large-scale
sustainability improvements in cases where
there is a market price signaling scarcity. For
example, if consumers face higher prices for
resources such as water and electricity, this
would stimulate more entrepreneurial activity
focused on economizing on these resources.
But I am pessimistic that the Zeronauts
will succeed in de-carbonizing our
economy. In the absence of carbon pricing
and in a growing world economy, global
greenhouse gas emissions will rise. Can the
Zeronauts figure out how to convince China
not to burn its coal endowment? Anticipating
that the answer is “no,” I published my
2010 book, Climatopolis, in which I optimistically
argue that profit-seeking entrepreneurs
will figure out many new strategies to
help us adapt to climate change.
Elkington’s book is a valuable contribution
at the intersection of business and
sustainability. He is right to emphasize that
human ingenuity, passion, and experimentation
will play a crucial role in helping us
to avoid the nightmare scenarios predicted
for the 21st century and beyond.
