Stealing a page from the Norwegian philosopher Arne Næss, who in 1973 coined the phrase Deep Ecology, (an ecological philosophy that recognizes the inherent worth of other beings aside from their utility), McKibben writes, “We need a similar shift in our thinking about economics – we need to take human satisfaction and societal durability more seriously; we need economics to mature as a discipline.”

This is reminiscent of E.M. Schumacher’s Buddhist Economics, which I referenced in an earlier book review for Green Prophet. What is unique about Deep Economy is that the author understands that the only conceivable way to create a deep ecology is to address our culture’s obsession with economics first and foremost.

“The Fortunate Few?”

The reader needs to hang several preconceived notions at the door before McKibben’s argument begins to resonate. Firstly, that more wealth and greater Gross Domestic Product (GDP) automatically translates to a higher standard of living, and by extension – more happiness or satisfaction.

Almost immediately, McKibben undermines these assumptions. He writes, “The median wage in the United States is the same as it was thirty years ago. The real income of the bottom 90 percent of American taxpayers has declined steadily: they earned $27,060 in real dollars in 1979, $25,646 in 2005.”

Take a minute to digest this.

That means that all the talk of a growing economy and wealth is actually only being felt by a handful of the population (relatively speaking). This addresses the first assertion that greater GDP means we are becoming wealthier. Then McKibben continues, “new research from many quarters has started to show that even when growth does make us wealthier, the greater wealth no longer makes us happier.”

So not only are most of us not actually getting wealthier, but those ‘fortunate few’ who are, are not buying anymore happiness.

According to a paper written by Ed Diener and E.P. Seligman entitled, “Beyond Money – Toward an Economy of Well Being,” “researchers report that money consistently buys happiness right up to about $10,000 per capita income, and that after that point the correlation disappears.”

Always the realist, McKibben acknowledges that some people, particularly in developing countries where basic needs are still far from being met are better off with more money. He writes, “Up to a certain point, none of what I have been saying holds true. Up to a certain point, more really does equal better.” After all, a person has got to eat.

Supermarket Trance

Apart from debunking the correlation myth between GDP and happiness, he takes a close look at the modern food industry a.k.a. agribusiness as a case in point for how more is far from better.

According to a Harvard Business School professor McKibben quotes from in the book, “fifty percent of the world’s assets and consumer expenditure belong to the food system. Half the jobs too.”

Similar to Michael Pollan’s claims in The Omnivore’s Dilemma, McKibben cites “the average bite of food an American eats has travelled fifteen hundred miles before it reaches her lips.”

Transportation and the resulting dependence on fossil fuel are greatly responsible for the tragic misunderstanding that most well-meaning Whole Foods shoppers participate in.

“Organic” could also mean that the banana you just ate was actually imported from Chile at great expense in terms of carbon emissions and destruction of natural resources. If consumers internalized this, then more of our food would be grown locally and that would prove to be better for us and the environment than organic food.

Consolidation or another path to “More,” has numerous other dangers. According to the McKibben, “Four companies slaughter 81 percent of American beef. Cargill, Inc. controls 45 percent of the globe’s grain trade, while its competitor Archer Daniels Midland controls another 30 percent.”

For more about ADM and how economic consolidation leads to corruption, I HIGHLY recommend listening to this podcast (The Fix Is In) from This American Life.

Only a few companies control more than 70 percent of the fluid milk sales in the US, according to the book. All of this consolidation has been born out of economic efficiency and the unwavering pursuit of growth. McKibben indicates the high cost of all these efficiencies. He list several costs including: damage to communities and people who lose their jobs, safety risks both to employees and the food that they are responsible for processing, and the resulting pollution from the likes of one farm in Ohio McKibben claims produces 3 billion eggs per year.

Distributed vs. Centralized Systems

McKibben see hope through distributing economies instead of consolidating them. If the focus shifts from monetary growth, this Deep Economy can lead to prosperity through decentralization.

He points to the rise in farmer’s markets and community supported agriculture (CSAs) groups where “the farmers who come in from the country to meet their suburban and urban customers, the customers who emerge from their supermarket trance to meet their neighbors.”

McKibben writes that “Beside food, the most important commodity in our lives is energy.” The sheer scale of our energy production today is astonishing and creating a more distributed model of production does seem daunting.

Deep Economy doesn’t advocate an immediate switch from our current model of almost complete centralized energy production and transmission to an entirely distributed model…yet. Rather, the author suggests a middle ground, or “something in between the individual cell powering the individual home, and the great power station feeding the whole state.” After all, transporting a head of lettuce 1,500 miles makes about as much sense as transmitting electricity the same distance.

Centralized Esnergy

Deep Economy also addresses the heavy toll that centralized energy has had on the world along with its accompanying security concerns and deleterious effects on the environment. Gone are the days when solar power was code for, in McKibben’s words, “a set of panels up on the roof and a set of batteries down in the basement, supporting a grinning, graying hippie happy in his off-the-grid paradise.”

By distributing power generation amongst several options (even if we keep fossil fuels in the mix), we can hedge our bets should one central generation facility fail. We wouldn’t need to depend on building another power plant that would only be used as backup 10 percent of the year.

Today, Finland, the Netherlands and Denmark generate between one-third and one-half of their power through decentralized projects. The book is filled with examples of similar projects that are taking place in communities that rarely make the news cycle.

Their MacGyver like solutions to either food or energy scarcity are a testament to the adage that “Necessity is the mother of invention.”

What is fascinating about many of these examples is that they have no impact on their nation’s GDP, so they fly under the radar and in the face of what most American politicians on both side of the aisle are seeking – double digit economic expansion.

You don’t need a degree in economic theory or environmental engineering to appreciate Bill McKibben’s Deep Economy. But you do need an open mind.

Some interesting factoids I gleaned from the book:

• Nature attempted to set an economic value on ‘ecosystem services,’ such as pollination and decomposition, that had always be counted as free. The estimate was a whopping $33 trillion annually, far larger than the human economy combined.
• In an effort to ‘get prices right,’ professor Bob Costanza estimated that the real cost (based on damage from production and use of the environment) of a gallon (1 US gallon = 3.785 litres) of gasoline should be $7-$8/gallon.
• Exemplary of the merging between social sciences and economics, Daniel Kahneman won the Nobel Prize in Economics in 2002 despite the fact that his training was in psychology.
• People born in advanced countries after 1955 are 3 times as likely as their grandparents to have a serious bout of depression.

Read more by David Goldman:

Review on Strategy for Sustainability
5 Tips for PR Companies to Gain Credibility
Friedman’s “Hot, Flat and Crowded” – The Perfect “Green” Starter Book

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David Andrew Goldman currently works as director of global communications at Expansion Media, an integrated PR/SEO firm that focuses exclusively on clean technology clients including Entech Solar, BioPetroClean, CASTion, AeroFarms, Airdye Solutions, Advanced Telemetry, Variable Wind Solutions, GreenRay Inc. and FreeGreen.com.

Perhaps because  my senior thesis as an undergraduate English  major, was entitled “The Paradox of Corporate Environmentalism.”

I wrote that paper back in 1997 while attending University of California, Santa Barbara. I  had the privilege of interviewing Congressman Henry Waxman (his son and I befriended one another at Tel Aviv University) for my thesis.

Extensive research and this interview with one of the true pioneers of incentive systems for marketable discharge permits, helped shape my view on corporate environmentalism. I learned a lot about various factions within the Green movement, corporate citizenship vs. government regulation, and the central role that economics played in all of these topics. My thesis volunteered that corporate citizenship was incredibly rare and statistically insignificant, like Nassim Nicholas Taleb’s Black Swan.

In Strategy for Sustainability, Werbach clearly takes another point of view with regard to corporate citizenship and I must admit it is a bit infectious. Werbach’s book, similar to his own professional career follows the trajectory of sustainability from academia (Werbach double majored at Brown University) to the crunchy granola, wholly organic playground of San Francisco to the boardrooms of some of the most influential and largest market cap companies on the planet – Wal-Mart, Clorox and Proctor & Gamble, to name a few.

What’s that? Surprised? It’s not the now tired list of companies you are used to hearing about like Ben & Jerry’s, the Body Shop, Patagonia, and Stoneyfield Farms? I can still remember Wal-Mart being caught up in that Kathie Lee Gifford sweatshop clothing line scandal in the mid 90’s. Clorox? Isn’t their core product line toxic? It all reminds me too much of a quote I once heard from comedian Chris Rock who said, “You know the world is going crazy when the best rapper is a white guy, the best golfer is a black guy, the tallest guy in the NBA is Chinese, the Swiss hold the America’s Cup, France is accusing the U.S. of arrogance, Germany doesn’t want to go to war…Need I say more.”

But it happens to be true that these three enormous companies are taking significant, paradigm-shifting steps toward sustainability, and perhaps a better and cleaner world.

Werbach sees the forest for the trees

The real focus of Strategy for Sustainability is that today the concept of sustainability is just as much, if not more about economics and culture than about preserving the environment. In today’s increasingly urban world (300 million Chinese are reportedly going to be moving to cities in the next 10 years), the idea of protecting the environment is far too abstract for most people. That isn’t to say Werbach doesn’t value the environment, on the contrary. As the youngest president of the Sierra Club in the organizations history (Werbach inherited the mantle from his mentor, David Brower when he was only 23 years old), he can just now see the forest for the trees.

Yes, things have changed considerably since the mid nineties, in some of the most unexpected of ways, too. For one, it appears that Third-Wave Environmentalists have won the debate over Decentralists. A quick review: throughout the late 1960s through the 1990’s Decentralist ‘greens’ held out the belief that economies of scale were our only salvation. Industry should consist of small niche operations that served local consumers. They had no discernable faith in the benefits of large corporations. E.F. Schumacher, a founder of the Decentralist movement once wrote, “Call a thing immoral or ugly, soul-destroying or a degradation of man, a peril to the peace of the world or to the well-being of future generations; as long as you have not shown it to be uneconomic you have not really questioned its right to exist, grow, and prosper.”

On the other hand, Third Wave Environmentalists are that more conservative group of ‘greens’ who acknowledge the present problems within current corporate treatment of the environment, but firmly believe that a revamping of the corporate philosophy and structure could effectively net both desirable and profitable results. As indicated by his book and his professional trajectory, Adam Werbach now clearly sits with the reigning Third Wave.

Video with Adam Werbach on his book

Click here to view the embedded video.

Werbach opens the book with a personal epiphany after his unsuccessful attempt to protect the wetlands surrounding New Orleans in the years leading up to Hurricane Katrina.

He writes, “…I knew we environmentalists could no longer do what we had been doing. Focusing solely on saving the environment did not suffice – did not save lives, livelihoods, or neighborhoods. We needed to fight for a larger kind of sustainability; one that took into account our social, economic, and cultural sustainability as well as our ecological surroundings. I could not just be an environmentalist. I had to think more comprehensively.”

This epiphany led Werbach to design his “Seven Tenets of a Strategy for Sustainability” including:

1. Natural resources will become increasingly scarce and expensive
2. Massive demographic change is occurring
3. People are the most important renewable resource
4. Cash flow matters more than quarterly earnings
5. Every organization’s operating environment will change as dramatically in the next three to five years as it has in the last five
6. A chaotic external world requires internal cohesion and flexibility
7. Only the truly transparent will survive

In my college thesis I wrote, “The inherent ideology of large corporations consisting of controlling elites dangerously lack in moderation, preservation and gradualism.” In our increasingly global economy, corporations, in fierce competition with one another must produce their goods as economically as possible. Pollution mediating technology thus proves to be “uneconomic” or “unsustainable” to the corporation and to its survival. Corporate philosophy, as dictated by one of its forefathers, John Maynard Keynes, recognizes that sustainability is not necessary to increase production and profits.

On the other hand Werbach writes in Strategy for Sustainability, that, “The corporate sector has the incentives, operational know-how, scalability, and ingenuity to respond to the global challenges we face today, challenges on all four fronts – social, economic, environmental, and cultural.”

Making corporations part of the solution

He’s right. In today’s fragmented world where multinational corporations wield both the money and political clout to make an impact that would embarrass many nation states, large corporations must be part of the solution. Werbach writes, “Over half of the world’s largest economies were corporations. “ Just because a company is big doesn’t mean that it will necessarily focus itself onto sustainable goals, however.

During my interview with Congressman Henry Waxman, the “Young Democrat” took a different stance on the likelihood of corporate citizenship (i.e. that corporations could be counted on to the do the right, if sustainable thing) Waxman said, “Corporations have not demonstrated significant leadership in terms of protecting our environment. They spend exorbitant amounts of money battling regulations in our courtrooms everyday and pit jobs against clean air.”

Werbach continues, “With this power come higher expectations. Society increasingly holds global businesses accountable as the only institutions powerful enough to respond at the scale of the challenges that our planet faces.”

In contrast, Waxman said, “We simply cannot rely on corporations to act environmentally responsible on their own. The history of industry has consistently demonstrated this unfortunate truth.” Waxman views pollution control and regulation as “inconsistent with bottom-line corporate philosophy and interests.”

I’m not sure that Werbach really would take issue with the Congressman from California on this point. Werbach acknowledges, “at least for now, the best strategies for sustainability come about in highly messy, decentralized, bottoms-up ways, where entrepreneurs like Anita Roddick (The Body Shop), Yvon Chouinard (Patagonia), and Gary Erickson (Cliffbar) create a company to complete a ‘get us to the moon’ mission, hire people who care about that mission, and then unleash their talent and passion to figure out how to complete it.”

In other words, the tired list (mentioned above) still represents the black swans in the universe, with larger less likely candidates slowly adapting to various external pressures.

I would argue that giant multinational corporations have joined the sustainable game not only out of a sense of obligation but because organizations like Greenpeace, the Sierra Club and several others have flagged them and galvanized enough consumers to force the corporations into compliance. To Werbach’s point, to ignore this media and consumer advocacy would have been…well, unsustainable.

Greenpeace’s efforts to target Apple is a great example of this approach and its effectiveness. Of course that could just be the Decentralist green in me speaking out.

::Strategy for Sustainability

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David Andrew Goldman currently works as director of global communications at Expansion Media, an integrated PR/SEO firm that focuses exclusively on clean technology clients including Entech Solar, BioPetroClean, CASTion Airdye Solutions, Advanced Telemetry, Variable Wind Solutions,GreenRay Inc. and FreeGreen.com.

The Genus of Genius: Someone once told me that there are three types of genius in the world. The first type of genius flows from those among us that birth brilliant and original ideas. The second type of genius belongs to those who can recognize the first type of genius. The third type of genius stems from those individuals who possess the ability to translate and transmit the first type.

Thomas L. Friedman’s book, Hot, Flat and Crowded (Why We Need A Green Revolution – And How It Can Renew America) indicates that the author likely falls into the third genus of genius. It isn’t the prose that impresses and the content isn’t that original either.

What Friedman does best is present disparate ideas from the worlds for business, science, homeland security and macro-economics into one coherent argument for the green revolution. Most of the ideas posited by Friedman to support his overarching thesis shouldn’t be foreign to even the armchair environmentalist. But it’s precisely the armchair environmentalist that has Friedman so (justifiably) worried.

According to Friedman:

“The final and most important sign that we are succeeding will be that the term ‘green’ blessedly disappears. There will be no such thing as a green building, a green car, a green appliance, a green window, or even green energy…Green will be the new standard. It will be the new normal – nothing else will be available, nothing else will be possible.”

Friedman levels strong criticism at what he perceives as the growing cosmetic concern about the environment and the energy crisis. He writes, “It is not about Earth Day concerts. It is not about special green issues of magazines. It is not about 205 easy ways to go green…too often and in too many ways, “green” has become a license to feel good without doing good, to raise awareness without actually changing our behavior.”

The Hot, Flat and Crowded Thesis

The book is divided into two parts. The first half focuses on the challenges facing the world today, including energy poverty, climate change, and loss of biodiversity, coupled challenges specifically facing the West including petro-dictatorship (e.g. Iran, Venezuela and yes, Russia) and America’s tarnished issue abroad. Although Friedman alludes to the opportunity that the world’s leading countries have by solving these problems, most of the first 200 pages focus on the formidable challenges the planet is facing.

According to Friedman:

“The world also has a problem: It is getting hot, flat and crowded. That is global warming, the stunning rise of the middle classes all over the world, and rapid population growth have converged in a way that could make our planet dangerously unstable. In particular, the convergence of hot, flat and crowded is tightening energy supplies, intensifying the extinction of plants and animals, deepening energy poverty, and strengthening petro-dictatorship, and accelerating climate change. How we address these interwoven global trends will determine a lot about the quality of life on earth in the twenty-first century.”

Hot, Flat and Crowded‘s thesis breaks up the world into electricity haves and have-nots. The argument is similar to Tom Athanasiou’s, in his groundbreaking book, Divided Planet: the ecology of rich and poor.

Both authors make a compelling argument that as middle class luxuries like hairdryers and iPods make their way into the developing world, the tax on natural resources will reach dangerous levels that are completely unsustainable.

The difference between Athanasiou’s book and Friedman’s is that Divided Planet was published 14 years ago in 1996. In other words, all of Athinisou’s assumptions have become indisputable facts by the publishing date of Hot, Flat and Crowded.

America’s Role in the Climate-Energy Era

Friedman posits that we are now entering a new era in history, the Energy-Climate Era. The second half of the book aims at how the planet can address these challenges.

As the subtitle indicates, Friedman sees America’s role as critical in solving the world’s environmental problems. He sees a direct connection between solving those problems and winning the war on terror. At one point in the introduction, Friedman recommends dropping code red in place of “Code Green” from the Department of Homeland Security’s current warning system. His elaboration on the obvious connection between global terrorism and the USA’s dependence on crude oil, the one fossil fuel that literally funds their fiercest enemies resonates here.

Friedman suggests that America has the opportunity to lead the world once again by embracing the challenges and making it a goal to do to energy what we did with IT, transform the world with new ideas that lead to new business models all focusing on efficiency, conservation and renewable energy. See, nothing earth-shattering here. In relation to America’s role in the Energy-Climate Era, Friedman says that US leadership is key both domestically and in foreign affairs:

“In a world that is Hot, Flat and Crowded, it is essential that the next president also be a CEO – chief energy officer – who finds a democratic way to establish authority over this American energy beast that is shouting and pulling in so many directions, and refocus it on the single priority of innovating and generating clean power, energy efficiency and conservation through a smart system.”

Friedman suggests that the US absorb itself with renewable energy sources. He compares “fuels from hell” – coal, oil and natural gas with “fuels from heaven” – wind, hydro-electric, tidal, biomass and solar power. According to Friedman, “These [fuels form heaven] all come from above ground, are endlessly renewable, and produce no harmful emissions.”

Hot, Flat and Crowded is the perfect starter kit to someone unfamiliar, but curious about climate change, the energy crisis, the alarming rate at which endangered species become extinct and what we (and the leaders we vote for) can do about these problems.

One glaring omission from this book was the mandate for multinational corporations to get involved in leading the fight on the world’s environmental challenges. In a world where Apple and Google have more money and influence around the world than most countries, innovation and leadership can just as easily begin at the checkout line as it can from the voting booth.

There aren’t that many ideas in the book that were unfamiliar, but Friedman’s writing style and obvious passion for the subject matter make the book very accessible and engaging for the reader.

::Hot, Flat and Crowded (on Amazon)

David Andrew Goldman currently works as director of global communications at Expansion Media, an integrated PR/SEO firm that focuses exclusively on clean technology clients including BioPetroClean, Airdye Solutions, Advanced Telemetry, Variable Wind Solutions, Technospin, GreenRay Solar and FreeGreen.com.

Working as Director of Global Communications at Expansion Media, David specialty is in raising awareness for emerging technologies with some of the best known global technology brands. He began his career at MS&L Worldwide in 1997 as the lead media contact for the eBay and Google accounts. From 2006-2008 David worked at the Online Reputation Management firm, RepRelations integrating SEO methods into his public relations programs for Fortune 100 companies. Expansion Media is an integrated PR/SEO firm that focuses primarily on Clean Technology clients including BioPetroClean, Airdye Solutions, GreenRay Solar, FreeGreen.com and many others.