Real life rancher Hunter Lovins is an ancestor to this current revolution in sustainability. She was co-founder and a long time leader of the Rocky Mountain Institute, prolific author of books like Natural Capitalism: Creating the Next Industrial Revolution, and a Time Hero of the Planet. Hunter has presented her thoughts in many venues- from the Bioneers conference to the most unlikely boardrooms, to the Googlers during their famous Tech talks– and today right here in Sonoma at “Climate Protection/ Everybody Profits” conference organized by Richard Dale and the good people at the Ecology Center. When asked if she gets tired of all the traveling, she says (in true cowgirl fashion), “Hey, we called this party- better show up.”

Lovins’ pragmatic thoughts on energy policy, sustainable business, and the need to shift our accounting practices to incorporate former externalities (like carbon) into the true cost of doing business are compelling.

In her most recent book, she lays out 4 principles for reinventing business: 1) radically increased resource productivity, 2) redesigning industry on biological models with closed loops and zero waste; 3) shifting from the sale of goods (for example, light bulbs) to the provision of services (illumination); and 4) reinvesting in the natural capital that is the basis of future prosperity.

Her non-profit is hired by big corporations to come in and give advice on retooling the culture as well as the supply and demand chain (here’s a taste of the more folksy advice: “you need real carrots, not sticks painted orange”). She worked with Ray Anderson at InterFlor when he was beginning the shift, and with WalMart on their global change to sustainability.  Sure is a lot of impact- she has my gratitude for that!

In the course of talking with her, I was also struck by the clarity and openness of her dialogue around economies and governance. Specifically, she spoke about the misinterpretation and misapplication of Adam Smith style capitalism, in an environment that Smith could never have imagined. We’re no longer working with the local markets of the 1800s with their relative transparency, but in a world where money moves across the planet at a keystroke. Even if a single government tries to protect the planet, or the commons, or establish a framework for fairness in which businesses may operate, in a global market with inconsistent rules, we don’t approach a free, much less a perfect, market.

Her line of thought- reminded me of the arguments of Nobel Prize winning economist Joseph Stiglitz. Stiglitz explains his position in his book Making Globalization Work:

Whenever there are “externalities”—where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated—markets will not work well. Some of the important instances have been long understood—environmental externalities. Markets, by themselves, will produce too much pollution. Markets, by themselves, will also produce too little basic research. (Remember, the government was responsible for financing most of the important scientific breakthroughs, including the internet and the first telegraph line, and most of the advances in bio-tech.)
But recent research has shown that these externalities are pervasive, whenever there is imperfect information or imperfect risk markets—that is always.

Not quite Noam Chomsky, or modern economic theories of mutualism, but very thought provoking- from someone who advocates healthy reinterpretation of industry.