The bumpy road to prosperity

Thanks for joining us on the second issue of regeneration economy insights. Goal of this issues is to help business people and stakeholders clarify confusion around degrowth and business. This will allow you perceive and grasp the opportunity in disguise and still do the right thing. Let’s jump right into that.

If you are also an eager learner, seeing you here means you are deep in sustainability and may come across terms like doughnut economy, circular economy, degrowth, postgrowth and more. Now with the increased interest in more eco- logical approach towards the way we live, we see cities testing or adopting these principles (example Amsterdam, Copenhagen and others). Some apply specifically Kate Raworth’s concept of the doughnut economy, some other call it -Wellbeing economy or other.

Degrowth has become rather common among urban and environmental activists, designers, and architects. However, there is hardly any public administration that has embraced the term degrowth. It has a?negative connotation and is many times associated with economic loss and recession.

Degrowth is actually related to improvement of human wellbeing in balance with nature. Insightful interview with Giorgios Kallis a?thought leader on formulation of degrowth and what it means for society. And it will for sure surprise you.

But back to our points, we see the terms mentioned above are often used interchangeably, depending on the setting and actors involved in the discussion, which may lead to dialogues that is messy and eventually lacking target.?

I?found it very useful to tackle the basics in Federico Savini’s piece on this, where he talks about short guidance to distinguish and compare these terms.

In short, post-growth is an approach, the doughnut?(or doughnut economy) is a tool, degrowth is an agenda and circular economy is a (business) model.

?WHY THIS AND WHY NOW

As discussed at our last article, regenerative is a process which purpose is to regenerate the damage done to natural environment. Therefore, regenerative economy is a sub system of a broader economic mindset based on full integration with all other systems (environmental and social).From that baseline three assumptions naturally emerge:

Systems Boundaries or Limits: Being finite, the natural systems have a limited capability to supply our needs of resources, whether to provide inputs to our economic processes or to receive and degrade our waste.

Limits to Growth: The economy, being a subsystem, is regulated and limited by the environment, not being possible for it to grow beyond environmental boundaries. Therefore, the well-known concept that infinite growth, as what we know now, at a finite planet is impossible.

The Need of a Healthy Environment: If our economy relies on the environment to exists, for it to be healthy it is a necessary condition that the environment also is for any environmental disruption will reflect into the economy.

Therefore, ecological economics require a perfect balance between economic, i.e. human, activities and the environment. Quite an interesting read on this from Josh Lepawsky bringing up the much discussed Laws of Thermodynamics in particular in the context of waste which lead us back to the point that it is not really inefficiency it is the consumption volume and speed that is killing us.

Many of current circular solutions are framed under the ideas of new economic theories which are actually processes towards an end, not the end by itself, but all flawed by the same. The misconception that they will allow the economy to keep growing. You certainly heard of them, the most famous being circular economics and regenerative economics. We should call them by what they really are, Circular Processes and Regenerative Processes.

Regenerative processes are meant to allow the economy to provide our needs but are constrained under the need to recover natural systems, not growth.

Circular processes are those that, working together with regenerative process, can help the transition to a really sustainable economy. Everything that happens before anything is sold to consumer, regardless if material of not (i.e., energy), is produced with the maximum possible efficiency, reducing costs and improving profits.

Therefore, anything proposed by mainstream economics as circular economics prior to the consumer is already happening and is nothing new (recycling included). So, what we have until now is a linear economy maximizing its efficiency and profits.

SHOP TILL YOU DROP

Now, where’s the wasteful component? That’s on the consumer’s side and that’s where eco- logical mindset kicks in to change things. The major contribution of the circular process is to bring awareness to the consumer about his wasteful way of life and how he can change by choosing to buy only what is needed, to avoid new products, to keep using something for as long as possible, to live with less (shoes, cars etc) and make the most of it.

Circular processes are meant to allow the economy to provide our needs but are constrained by consumers consuming only what’s really necessary, regardless of economic growth.

THE BRAINPRINT OF MARKETING

There is a whole industry involved with spreading a mis constructed narrative. Will we be able to shift the perspective and stop promoting an identity and culture that is based on shopping (consumption)? And rather focus on experience, wellbeing and shared values (example healthy environment for all). For doing this we need great alternatives that work and the best storytellers of our times.

THE MOST RESILIENT ECOSYSTEM

Resilience can be defined as the ability of a system to continue functioning and recover from a disturbance to its previous balanced state. If the disturbance is too intense the system will move into a new balance state, becoming a different system, as a tropical forest being transformed into a savannah due to deforestation.

One example of a most resilient ecosystem on earth is the deserts as, after being impacted, it can easily recover to its conditions prior of the impact. Actually, it’s extremely hard to convert it into another system, without intense effort and energy input.

IS OUR CURRENT SYSTEM RESILIANT TO SHOCKS ?

The recent 2 years tell you; we have a lot to improve especially looking at the supply chain and production side. So, localization and alternatives that can provide for the need, let’s say high quality fresh food should be developed as a priority. Also, as simple risk management, as we know with climate change more extreme and more intensive weather events are coming. So, we rather team up and upper our game to get resilient and surely do not make same mistakes.

BUSINESS TRANSFORMATION

Transformation is a complete change in the appearance or character of something or someone, especially so that that thing or person is improved. Transition is the process or a period of changing from one state or condition to another.

To be able to transition to regenerative economy, businesses need to find ways to earn money so they can continue to provide employment opportunities and enable people to provide for their families. The difference is we cannot cross the border of producing harmful/ toxic materials and or doing it at the same volume and speed. So, if your intent is to have a viable business, the best maybe be providing long term value along the whole value chain and consumers.

Example furniture manufacturer in Spain: You should have clarity on your supply chain end to end and materials used, where and which conditions they come from and be ready / open to do things better. Not to forget everything where you leave your footprint- water, transport, soil and biodiversity you have an impact on. Look for local alternatives, different materials and or new models in the first place to sell/ or rent /share your products with a service model around that? In these tough economic times, many people are looking for ways to shave expenses off their budgets.

More on that to follow with details to start your business transformation with a Life Cycle Deep Dive in our next issue.?Stay tuned.

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This article has been produced in cocreation together with Dr. Julio Campos , Ecological Economy expert and Diego Romeiro , Researcher in Sustainability, Ecology, Biotechnology, both valued members of frogeex network advising companies, municipalities and organizations on their prosperous holistic sustainability journey.