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Open Thread: Sustainability/Innovation Implications of the Meltdown
Alex Steffen, 21 Nov 08

This morning in Amsterdam the media is reporting a financial "meltdown," with stocks back to the level they were before the Dot.com Boom and international credit markets "seizing."

Question: what are the implications of this meltdown for sustainability and social innovation?

What are the implications in terms of pursuing sustainability and social innovation? What new approaches are now possible? What new approaches are now necessary? What kinds of unexpected innovations and solutions may we see emerge?

Also, what are the implications for those trying to advance sustainability and social innovation? Clearly, there are many ways in which a business case can be made for various sustainability/S.I. answers, and there are strong arguments to be made for a bright green recovery, but in what ways will the meltdown change how do what we do (and how we sell what we do)?

I'd love to hear your thoughts.

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Comments

Here's something more concrete than blind speculation: I attended an open residential solar seminar this week, sponsored by an Akeena Solar salesperson. The room was completely full.

This was late on a weeknight in a fairly conservative part of Denver, Highlands Ranch.

The salesperson said that he had signed up 15 KwH of business before then, and expected to meet his goal of 30 KwH soon after.


Posted by: Ken Oatman on 21 Nov 08

I just posted a comment that fell foul of your spamcatcher, probably because of the links. so here it is again, sans links -

Hmm. I recently read an interesting O‘Reilly post & discussion that raised the question, what’s different socially and culturally this time round, given that we have had regular financial seizures every generation or so? An obvious answer is the web, and Clay Shirky’s ‘cognitive surplus’ might kick in with unpredictable consequences. Job losses mean that there are going to be millions more people with a whole lot more free time – and while I’m not suggesting that increased unemployment is a good thing, some of those people will use that time to tinker, create and contribute. I read somewhere a claim that web 2.0 came around as a direct consequence of the dotcom bust, when thousands of out-of-work developers turned to tinkering with the stuff that really interested them – so perhaps we could be in for another growth spurt in opensource software and hardware and socially-focussed projects.

What also seems to be different is that there is, in the mainstream, a growing sense that the discontinuity goes deeper than the financial. The suddenness of the financial collapse since September, the sheer number of previously ‘unimaginable’ events (within the prevailing paradigm) such as the nationalisation of the banks, has created a space for people to start to seriously consider other ‘unimaginable’ possibilities for the near future. (This has actually, I think, caught out the bulk of the environmental movement – we’re so used to incremental change that now a truly fertile moment is here, we’re scrabbling around as much as everyone else)

So it looks like a growth time for decentralised movements that can harness creativity and the desire for something to do, or speak to the ‘unimaginable’, or preferably both. Transition Towns is a good example of one that’s mushrooming right now. I think part of the reason for their success is their emphasis on the highly experimental nature of what they’re doing – no-one pretends to have the answers, and that chimes with a feeling that most ‘experts’ currently have egg on their faces and can’t really be trusted. Where it leaves the more institutionalised elements of the green movement, I’m not sure.


Posted by: Joy on 21 Nov 08

I think, since governments are going to be looking for infrastructure to invest in to stimulate the economy, it would be really good idea to push them to invest in green infrastructure. Caw!


Posted by: The Raven on 21 Nov 08

It's a fascinating moment right now. Private equity is going to continue its flight to quality, meaning that government will have cheap money for infrastructure as long as it's mildly profitable and low-risk. That makes transit, congestion pricing, and green infrastructure a big possibility, much like parks and road funding appeared as the last Great Depression showed up.

Efficiency is also a big winner, since it can also offer a low risk rate of return more competitive than a lot of what you'll find in the markets right now.

And finally, we have a much needed breath as the economy slows down and the various strains on our ecosystems is eased as production and consumption back off.

I expect people will begin finding happiness in areas other than consumption, such as family, religion, and volunteering. There are major environmental opportunities here also.

I've got to say, I'm bullish on bright green futures.


Posted by: Lyle Solla-Yates on 21 Nov 08

I think the meltdown makes everything governance related more imperative. This can be an opportunity, or a disaster. There's a huge amount of pressure to do *something*, and and so *something* will get done. Politically, one cannot avoid responding to a crisis. The trick will be ensuring that the *right* things get done. Just because people are amenable to - or indeed expect - change, doesn't mean the change we get will be the change we need.

In the same way that, after 9/11, the DoJ pulled the Patriot Act, essentially verbatim, out of some locked filing cabinet, whatever ideas are laying around now, easily accessible, and apparently relevant, will be the ones that get implemented. We need to make sure that we speak with one voice, not a cacophony. If we do, our cause may be the one that's taken up. If we fail to do so, it is not unlikely that someone else with a more unified message will get listened to. You've written about this here before.

For those of us in the US, I think one thing that is especially important is that we do NOT link sustainability to socialistic ideals, regardless of whether we happen to hold socialistic ideas. Regardless of whether it is deserved, or even relevant to the world today, there is still a lot of latent resentment of "socialism" in the US. Phrases like "Green New Deal" are, I think, a disaster waiting to happen. Few people in the US alive today really identify strongly and positively with the New Deal, but many people identify strongly and negatively with capital 'S' Socialism. This is largely a question of effective framing. Personally I think sustainability and socialistic ideas are largely orthogonal, except insofar as externalities like environmental degradation are very unjustly distributed, and I don't think we do the cause of sustainability any good by spuriously linking it to socialism - it just provides an unnecessary hook for vituperative criticism from the right (which is still there, and still composes HALF the US, even if they're currently on the down and out by a couple of percentage points). We shouldn't make their eventual comeback attempts any easier than they need to be.


Posted by: Zane Selvans on 21 Nov 08

The broad shortage of capital created by the crash also means that it is much more important to invest in the BEST options, instead of everything at once, Manhattan Project style. Amory Lovins talks a lot about this. Increased supply (renewables) and decreased demand (efficiency) need to be able to compete on equal footing for us to really do the right thing... and currently, they are not able to. We all need to be okay with demand reduction winning, even if it means fewer windmills and solar thermal plants (cool though they are). Taking a fossil fuel or nuclear power plant offline, and replacing it with *nothing* is in fact much greener than building new renewable generation capacity on top of our existing power plants.


Posted by: Zane Selvans on 21 Nov 08

equivalent standards. anything that is much greener with similar-or-lower TCO should be made law now.

teaching. for jobs and for high standards, of course, and: people need to see what can be done over 20 years. remind them they'll live through this and creatively, besides.

destruction. the world now looks like a minefield of asset-devaluating hell. people are paralyzed in hold-to-maturity. start tearing junk apart. "the new world starts here."

solidarity. strongly disagree with avoiding "socialist" appearance. the national level (gov't, banks, what have you) has all the money power and much interest in consolidating while they can. greening is about moving control down the ladder and living in a shared future. a means of common, durable prosperity is something to celebrate. "we will go there together."

focus. the economy melted because we took our eye off the ball -- let ourselves believe "cash" is a plan. well, you get what you make. now is the time to learn and plan for what we want and build it. not hunker down behind sunk costs waiting for the return of a rising tide most didn't get the first time.

think bigger. the atomic unit of a global urban civilization is probably the watershed that supplies the city, and such? any smaller than that, than the largest system we can disrupt in any category, and we're walking through another minefield, waiting for the bad news again. i don't think it's enough to say, "know where your food comes from." where does OUR food come from. where does OUR power come from. own the issue together.


Posted by: hapa on 22 Nov 08

Alex.

Over the last 2 weeks I have attended 2 cleantech conferences, met with multiple groups, and held several roundtables in China to work out some of the questions you have asked.

1) The Need - The financial meltdown will only heighten awareness on many of the issues we would say are "sustainability issues". The environment, food, and water are all issues that are front and center right now in China, and the pressure from citizens is growing for someone to do something to the point where real activists are popping up.

2) Issues of important - For China (and really therest of world), the usual suspects of solar, hybrid tech, and wind power are not the critical items. It still is the basics of food, water, shelter, and access to services that will reduce poverty (education) and improve life (healthcare).

3) Cleantech - to be honest, the majority of VC /PE money had beensitting idle anyway, so I do not see a real financing issue. The Chinese government is far more forward leaning than the US, so they offer a lotof incentives for companies (free land, cheap rent, no tex, interest free loans, etC), so entrepreneurs have a bit more support.

With this in mind, there are several actors that are learning their roles. Historically, anything related to "sustainability" was driven by Beijing, and many NGOs / Media were on the sidelines. Citizens were not likely to get engaged unless something big happened, but as the big events have piled on (air pollution, algae blooms, & melamine in the milk), questions related to the costs/ sacrifices of development have begun to be asked... enter the media (who relieved the pressure of NGOs to highlight issues) and the NGOs (who are gaining the trust of government/ citizens).

In short.. the actors of civil society are learning how to play in the sand box.

going forward, this will create pressure on various corporations, government agencies, and civil society as a whole to clean up. The pressure points will start with food, water, healthcare.. and through this we will see changes in energy policies/ investment, raw materials extraction, and a whole host of other things.

It is a process that will continue through the crisis, and in many ways it should in many ways be viewed as something separate from the crisis.

R
www.cleanergreenerchina.com


Posted by: Cleaner Greener China on 22 Nov 08

Surely as people's wallets become lighter, they will prefer to use their remaining money on efficient, money saving things (or learn to do without). Nobody likes poverty, but at least poor people don't waste a huge part of their money on fripperies.

As the global population starts to tighten their belts, people will vote with their money for services that cost less, last longer, and have lower maintenance and running costs. The faster designers, who have realised this, will be the people still making a profit, while the industrial giants of today flounder.

This economic crisis may be just the armageddon we need to shake ourselves up, instead of blindly continuing in our little bubbles of comfort!


Posted by: diminoc on 23 Nov 08

There will be some support for efficiency, but a lot of people will just hold on to their gas-guzzling cars and refuse to invest in home and business retrofits that have long-term payoffs, in order to conserve cash in the short run. This will blow up in their faces the next time commodity prices spike. My approach is to cut back on non-essentials and to invest what funds I do have in ways that have medium- and long term payoffs.


Posted by: Jay Turner on 25 Nov 08

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