Director, Policy and Strategy
Green Innovations Inc.
Tel & fax: +61 3 9486 4799
Revised 4th August 1998 - Version 1.b.w:i
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People often ask "which industries should we start our sustainability work
with?". One person nominated the aluminium industry because it had
played a very negative role in the recent climate change negotiations
and because it is possible to envisage a restructured aluminium
industry playing a continuing role in a sustainable economy. Are these
sufficient reasons to focus our sustainability-promoting efforts on this
by Philip Sutton.
I think we need to have a multi-pronged approach to transforming
industry based on the following three strategies of:
engaging the potentially big winners in the new paradigm of the sustainable economy
encouraging strategic defections
providing structural adjustment support to the losers.
In Australia at least, we spend almost all our time trying to talk
environmental destroyers into being green. This makes sense when the
only approach to greening is to encourage companies to reduce their own
negative impacts. But we also want companies to to think more widely
and to do whatever is needed to help society to be
The 'reduce-negative-impacts' approach runs the risk of leaving the
industrial structure relatively unchanged. To achieve ecological and
social sustainability however we need to seriously pursue the creation
a dematerialised economy
a closed-cycle economy
an ultra-land-efficient economy (to create space for major habitat restoration
a lower population economy.
This involves a big paradigm shift and the future dominant
industries will almost certainly be very different from the current
ones. Since we want to encourage the structural shift of the economy
to the new pattern we should be spending a lot of time identifying the
winners and the new opportunities. We then need to activate the
elements in the current economy that can take on the new opportunities
most effectively. Then, to quote Peter Ellyard, we can create vested
interests in the 'sustainable future' that can do battle with the vested
interests in the 'unsustainable present'.
If we follow this strategy we should be spending a lot of time
talking to service industries and the information industries, even
more so than the remedial industries like pollution control, recycling
and bush restoration. That is not to say the remedial industries are
not important. They are important. But they, like the mining and
agricultural industries, will never be more than a small percent of
the economy. The mega-winners of the future will be the service and
info companies that deliver high (and growing?) living standards for
all while creating the dematerialised, closed-cycle, land-efficient economy.
The next strategy is to work with industries where strategic
defections from the camp of the vested interests in the unsustainable
present are possible. The work by the Rocky Mountain Institute to get the hypercar
onto the market, and to get first BP and then Shell to defect from the
'climate change is no problem' lobby group are powerful examples of
this strategy in action. The advantage of this sort of shift is that
it shakes up and significantly erodes the political power of the group
of vested interests in the 'unsustainable present'.
However, because the defectors come from the dominant industries in
the old industrial structure they will most often be reluctant to
shift paradigms altogether and so if we rely upon this strategy alone
there is a big risk that the needed industrial restructuring will get
stuck halfway. I think the problems with Monsanto illustrate this
phenomenon very graphically.
It is therefore essential to complement the "encourage strategic
defections" strategy with big efforts to "engage the potentially big
winners in the new paradigm of the sustainable economy".
The final strategy is to "provide structural adjustment support to the
losers". The rise of 'surly politics', exemplified in Australia by the
Hanson phenomenon, shows what happens if major change is not
accompanied by consideration for the losers. This sort of structural
adjustment usually requires significant expenditures and government
involvement is essential. It is also essential to keep in mind that
the key requirement of structural adjustment is to look after the
affected people. The interests of the affected firms should come
second. It is not necessarily a disaster if an obsolete firm that
cannot find a future in the sustainable economy goes into liquidation,
but it is a calamity if people dependent on obsolete firms suffer.
Care needs to be taken to avoid obsolete firms creating an effective
political coalition to fight the needed changes. Structural adjustment
assistance can play a very important role here too including assistance to
firms to help them find a transformation path into the new economy.
So what does that mean in relation to the aluminium industry? I
think this industry falls into the category of those theoretically
capable of being strategic defectors. So they are worth working
with provided we put in enough effort, early enough, to "engage the
potentially big winners in the new paradigm of the sustainable
But before we can do the latter we have to imagine what the winning
areas will be on the way to and in a sustainable economy.
Last modified: 4 August 1998
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