Two weeks ago, we learned that if we continued to live beyond our means at the current pace, mankind would need to have a second planet to provide for all the natural resources it consumes. We explained the concept of sustainability, which aims to reconcile long-term prosperity and progress of humanity with the recovery needs of balanced, self-sustaining eco-systems on planet Earth. Today, let’s spend some time on what is at the core of the sustainability challenge and what are options to respond to it.

Economic rationales behind exploitive behavior

Why are we living beyond our means? I believe that we may find an explanation to this question in an important theoretical concept of microeconomics that is known as “externalization of internal costs.”

So far, most companies consider in their product cost accounting only the cost related to the raw materials, production, marketing and distribution of a given product. However, on top of these pure raw material costs, each product incurs other “ecological costs” associated with its production:

• The “ecological backpack” is a new concept that aims to capture the ecological costs of production of a good. It measures how many kilos of natural resources are needed to produce a certain product. For example, the production of one pair of jeans (of ca. 600g) requires 32 kilograms of resources, which gives a pair of jeans an ecological backpack of 53. In contrast, plastic has only an ecological backpack of 5.

• In addition, most companies disregard costs that are associated with the recycling and disposal of their product at the end of its lifetime, including the costs for long-term storage of (hazardous) waste.

Both the costs associated with the ecological backpack of a product and its disposal are external costs that so far, companies have passed on to society and future generations, who will have to clean up or deal with the mess.

One day in the future, once the sustainability challenge becomes a hot political topic deciding elections, legislators will force companies to internalize these external ecological costs of a product (that includes its ecological backpack and long-term recycling costs). I predict that within the next 30 years, we will see such an internalization of external costs, forcing companies to either cope with reduced profit margins and/or pass the higher cost on to their end consumers in higher prices.

Perspectives on how to respond to the sustainability challenge

When confronted with the challenge that over the past decades, mankind has lived beyond its means, and that the current levels of consumption and utilization of natural resources endanger the long-term sustainability of future generations and other species on planet Earth, most politicians, businesspeople and individual consumers tend to subscribe to one of three schools of thought:

• Firstly, the ignorant point of view is to either deny the existence of the sustainability challenge, or to choose to ignore the problem. In any case, ignoramuses maintain a “business as usual” attitude and continue exploiting the planet’s resources by arguing that “It is our right to catch up” or “We deserve maintaining our current lifestyle and consumption habits.” Clearly, taking this pessimistic position is very self-centered and ignores the interests of future generations and endangered species in the wider biosphere. (A creative response to such an argument is: “Well, you don’t have to repeat the same mistakes that they did, but may rather leapfrog to more sustainable solutions and behaviors right away.”)

• Secondly, “It’s already too late for an ecological turnaround” is the pessimistic perspective on the sustainability challenge. Pessimists tend to continue current consumption patterns while believing that a major crisis and crash of the current economic system is unavoidable in the future. As a consequent and rational response to this view, pessimists invest today in creating “civilization arks” that allow their cultures to survive and humanely master the challenges of environmental degradation, economic attrition, hunger, war, migration, and so on. Consequently, pessimists prepare for the imminent competition for scarce resources by adopting an “us versus them” attitude that is ready to take the few resources that humanity will be left with in a few decades.

• Thirdly and finally, the optimistic perspective assumes that a radical and fast system change toward a more sustainable economic, social and environmental system is possible. Subscribing to the optimistic point of view is based on a series of optimistic assumptions: (a) Decisive turning-points of irreversible ecosystemic changes have yet to be reached; (b) Human beings are able to adapt, learn from past mistakes and take concerted actions; (c) Humanity is able to develop new technological solutions (e.g., for renewable or new forms of energy such as nuclear fusion) just-in-time ahead of a system collapse; and (d) wider cultural changes to reach a stabilization and ultimately a reversal of the current ecological, social and cultural degradation are possible.

As a creative professional or business leader, subscribe to the optimistic point of view that a shift toward a sustainable society is still possible, and then do your part to help create more meaningful and sustainable products, services and solutions in the future. In two weeks, we will discuss in the third and final part of this article what we can do as creative professionals and consumers to rise up to the immense sustainability challenge.

© Dr. Detlef Reis 2010. This article was published in parallel in the Bangkok Post under the title “Motivations behind the sustainability challenge” on 23 December 2010.