Part 4 - Summary
Part 4 reviews a number of approaches that have been proposed to enable the move to a more sustainable economic system. Although all of these can make a contribution, we should also highlight the potential flaws of such approaches in order to avoid the impression that all solutions are already readily available. Particularly in the areas of ‘hearts and minds’, organisational and social innovation, more work is definitely needed and a way of integrating all these lines of thinking is also overdue – it is still often the case that emphasising one particular problem can lead to problems elsewhere. In this context, this chapter considers the closed loop economy concept and ‘beyond ownership’ approaches such as product service systems.
Speak of human population growth and the iconic figure of Thomas Malthus immediately springs to mind. More concerning is the fact that his ideas have often been adopted by environmentalists, who argue that if population could be controlled, we could move towards a more sustainable world. A subtext can often be suspected that, if only there were fewer people in poorer countries, those of us in rich countries could carry on as ‘normal’. However, it has become quite clear that as poverty is alleviated and education levels – particularly of women – increase, fertility rates decline and populations stabilise. The problem is not birth rates, but income, health care, security and simply the reduction of the need to make sure you have surviving children to look after you in your old age. These factors have all improved in recent decades, prompting the UN to revise its population growth forecasts and in fact now forecasting a gradual decline towards the end of this century.
In conventional economics there is a strong strand of thinking that technological innovation will solve most of our problems. For the ecological problems facing us, this has also often been suggested. If this works, we do need to put the necessary resources into such priorities, otherwise those innovations will not happen. Here, the role of the public sector has been overlooked as the private sector has come to be seen as more innovative and more efficient. Mazzucato (2013, 2019) has highlighted the key role of the public sector in the development of the pre-market technologies needed for that private sector innovation to even happen, while Dorling (2020) discovered that the rate of technological innovation has actually been slowing down. Within automotive, the major revolution at present is the shift from internal combustion (IC) to electric vehicles (EV), drawing on technology that was pioneered in the 1840s (EV) and 1860s (rechargeable batteries). Innovations now include applications of existing technologies to new areas such as automated cars, these trends will lead to significant change.
Energy for an EV can be generated from renewables, while over time home heating and cooling, can also be delivered this way. Such developments have the potential to phase out some major concerns of the existing sustainability model by addressing climate change and local air quality, while energy supply can be decentralised into local communities. These developments change the fundamentals of our economies in quite significant ways. On the other hand, new materials need to be accessed, explored and developed in order to support these technologies, leading to new environmental impacts. In addition to technological innovations, we should also be thinking about the social innovations needed and the increasing social control exerted by firms delivering these technologies.
Manufacturing itself will also change. In addition to new technologies like additive manufacturing, a version of micro factory retailing (MFR) could become one of the dominant business models for the supply and use of motorised personal mobility and other goods and services. MFR would be based on networks of small dispersed, combined assembly, retail and aftercare or lifetime management (e.g. maintenance and repair, parts supply, upgrade, vehicle management and takeback) facilities that could operate car use under a product-service system (PSS) whereby ownership is retained by the company and users pay for their use. About 70-80 million cars are produced worldwide each year, a practice that is clearly unsustainable. In the longer term, if car making is to survive, then all car manufacturers will have to move towards a business model closer to that of low volume manufacturers.
We have tried to tackle the problems inherent in our economic model, which is driven by unsustainable production systems and business models, while being facilitated by unsustainable supply chains. Yet, in many cases, solutions are already available. Most of the responsibility for overconsumption lies with the supply side, which needed to develop mass markets in order to meet the needs of the economies of scale that came with the mass production technologies adopted, while the crucial link between production and consumption, the supply web, hardly ever features in the literature. Producer-led consumption has entered a new phase with the rise of the so-called ‘tech’ companies, that seek a much more intensive all-encompassing control of markets and consumers to a degree older companies could only dream of; taking even more control away from consumers and citizens. While the primary responsibility, lies with the supply side, as consumers we must appreciate that we are part of a system. A return to ‘normal’ may suit some of us, but many of us were already losing out. The 2020 coronavirus crisis has shown that if our interactions with other parts of the natural system are not based on respect, nature can come back to bite us in ways that not only affect our very existence as humans but that can also wreak havoc with our economic systems. The crisis should thus make people question the way we work, consume and produce.