Philip Sutton Convener Greenleap Strategic Institute 29 October 2006 Version 1'b

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Philip SuttonConvenerGreenleap Strategic
Institute29 October 2006 (Version 1.b)

• Creating a
• Green Growth Strategy
• Workshop notes

Up-to-date notes can be found at
http//www.green-innovations.asn.au/green-growth/
Green-growth.htm
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Anchoring Green Growth Strategies on actually
achieving sustainability, very fast
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The real structure of the economy
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Conversion of Natures economy to the Human
economy
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Once the human economy gets large enough
(relative to the size of the earth) indirect
costs escalate at a hyper-exponential rate, and
both the natural environment and the human
economy become unsustainable
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There is a rapid switch in the ratio of Direct
vs Indirect Costs of developments as natures
economy shrinks and the human economy grows
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Climate change case study
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400,000 year record of CO2 and temperature
Petit, J. et al. (1999). "Climate and atmospheric
history of the past 420,000 years from the Vostok
ice core, Antarctica", Nature, Volume 399 Number
6735 Pp. 429-436.
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Flows of emissions of CO2 from burning
fossil-fuels have risen rapidly since 1950
Gt CO2
Source World Resources Institute, CAIT
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Strong Global Warming Observed
Hadley Centre for Climate Prediction and
Research Based on Folland et al (2000) and Jones
and Moberg (2003)
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Global soil moisture trends 1948 - 2002
This depiction of linear trends in the Palmer
Drought Severity Index from 1948 to 2002 shows
drying (reds and pinks) across much of Canada,
Europe, Asia, and Africa and moistening (green)
across parts of the United States, Argentina,
Scandinavia, and western Australia. (Illustration
courtesy Aiguo Dai and the American
Meteorological Society.) National Center for
Atmospheric Research (NCAR) http//www.ucar.edu/ne
ws/releases/2005/drought_research.shtml
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Global insurance losses1970 2005
Source Swiss Re sigma no1/2005
www.theclimategroup.org/assets/Bruce20Thomas20(0
6-0420pm).ppt
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Additional short term threats

• Increased frequency and more intense fires
• Increased storms severity (cyclones, hurricanes,
  tornados, hail storms)
• Bigger sea storm surges
• Higher temperatures / heat stress
• Increased soil loss / dust storms
• Water shortages
• Migration of pests and diseases
• Loss of soil carbon
• Food shortages

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2 ºC warming is thought to be a rough boundary
between dangerous and catastrophic climate
change
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Global average surface equilibrium temperature
change for various stabilization targets.
Source Azar, C., Rodhe, H., 1997. Targets for
Stabilization of Atmospheric CO2. Science 276,
1818-1819. . Dashed line a) refers to an estimate
of the maximum natural variability of the global
temperature over the past millennium, and dashed
line b) shows the 2oC temperature threshold.
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Modelling the recent evolution of global drought
and projections for the 21st century with the
Hadley Centre climate model Eleanor J. Burke,
Simon J. Brown and Nikolaos Christidis Hadley
Centre for Climate Prediction and
Research October 2006
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• Severe drought over 40 of land (agriculture
  unviable on 30)
• Near total loss of the Amazon
• Between 20 - 60 loss of all species on Earth
• Accelerating sea level rise
• Loss of Himalayan ice sheet (and seasonal snow
  melt)
• Loss of the Arctic and Antarctic sea ice
• Melting of the permafrost

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Crucial Prevention AspectAvoiding Catastrophic
Climate Change
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Dangerous catastrophic climate change

• We have already entered the realm of dangerous
  climate change
• It is thought that warming more than 2ºC over the
  pre-industrial level will lead to catastrophic
  climate change
• There is a 20-30 chance that we will trigger 2ºC
  warming with 400 ppm CO2 an atmospheric level
  that will be reached in less than 10 years
  unless massive cuts now.

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We need to treat climate change not as a
long-term threat to our environment but as an
immediate threat to our security andprosperity
It is now becomingincreasingly clear that it is
what we do in the next 15 years that matters
most. John Ashton, the UK's climatechange
envoy, 8 September 2006
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One scenario for stabilising atmospheric CO2 at
350 ppmv.
Enting, I., Wigley, T. and Heimann, M. (1994).
Technical Paper No. 31 Future emissions and
concentrations of carbon dioxide Key ocean /
atmosphere / land analyses. CSIRO Division of
Atmospheric Research Melbourne.
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There is too much CO2 in the air right now!

• We need to get to zero greenhouse gas emissions
  as fast as possible (within 10 years)
• We need to take excess CO2 out of the air as fast
  as possible to bring the atmospheric level down
  to between 300-280 ppm (precautionary principle)

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End ofclimate change case study
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A completely new development paradigm needed

• Green growth must be 100 decoupled from damage
  and it must enable the restoration of natures
  economy (our sector zero) to safe condition.
• Economic development must now be truly
  ecologically sustainable.
• This is not comfortable political rhetoric it
  has huge implications for how to change and
  manage the economy and for how politics is
  conducted.

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Key is to 100 de-link economic growth from
environmental impact / waste
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Homeostatic management

• Dynamically creating/maintaining a state of
  sustainability
• prevention (eg. Natural Step principles)
• recovery/restoration

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Key concepts

• We need to be clear about what we are trying to
  sustain and the scale and urgency of the task
• We have to apply double-practicality - get things
  done and do things that actually solve problems
• Sustainability requires having no major
  trade-offs
• We need to recognise that we are facing a global
  sustainability emergency.

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Creating a Green Growth Strategy
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Economic growth relates to the service flow (of
the whole product), not to the physical
platform (which makes it possible for
dematerialisation to work)
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The conditions under which a truly sustainable
economy could have continuing economic growth
                     
Continually rising service flow - to benefit a
stable population at a sustainable level
                                         
Fixed (or declining) stock of materials
maintained in a closed-cycle (with minuscule top
up from nature)
Stock enhanced while in use
New capital
Reuse recycle
Fixed (or declining) flow of renewable energy
         
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Old business-as-usual, new business-as-usual and
the sustainability-achieving economy

• The old business-as-usual economy is based on
  physical expansion, resource throughput and only
  (sometimes scant) attention to local
  environmental problems
• The new business-as-usual is beginning to
  emerging in response to climate change and other
  environmental crises it is using a new
  generation of technologies to make a big
  reduction in externalities but it does not
  attempt to fully eliminate externalities so it
  will face new crises down the track as the
  economy grows
• The sustainability-achieving green growth
  paradigm is based on systematically eliminating
  externalities so that economic growth does not
  periodically recreate major crises.

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Fastest industrial restructuring

• Korea from agricultural nation to world
  competitive manufacturing economy in 20 years
• US after Pearl Harbor from worlds largest
  consumer economy to worlds largest war economy
  in 1 year

(complete infrastructure change)
(complete change to how infrastructure is used)
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Divide action into a crash program a long
run innovation program

• If any of the calibration or solution changing
  issues require major changes to the economy
  within a 5-20 year period, they need to be
  managed through a formally recognised crash
  program
• Any issues that will have (a) a big impact on the
  economy or (b) must be responded to, but can be
  tackled over an extended time period, should be
  part of a long run radical invention innovation
  program.

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Analyse new economies using supply chains rather
than industry sectors regional economies

• The economy is going to have to change so much,
  in so many detailed ways, that if we use industry
  sectors regional economies as the basis for
  analysis and solution building, we will lock in
  old (bad) practice and vested interests
• Information about transformed industry sectors
  regional economies should be created by
  aggregating data or ideas about the new supply
  chains.

Includes the end of life chains as well to
make up a full lifecycle chain.
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Simplifying the task of dealing with multiple
issues at the level of industry/economy
restructuring

• Pick the issues that have the biggest impact that
  cant be ignored or that we cant afford to
  ignore (eg. climate change, peak oil, water, food
  supply)
• Use these issues to work out the maximum scale
  speed of action necessary this calibrates the
  restructuring (calibration issues)
• Identify other important issues that ought to be
  taken really seriously where if these issues
  are taken into account solutions to the other
  issues will need to be changed (eg. biodiversity)
  (solution-changing issues)
• Deal with all other issues at the level of
  detailed implementation of the restructuring
  program.

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Near term economic growth is compatible with a
major once-off restoration of the environment
if..

• the total of all the physical platforms of all
  economic output can be changed in character and
  shrunk small enough physically to be compatible
  with the maintenance of everything that needs to
  be sustained, AND
• the real value of economic output does not
  collapse in the process of physical adjustment
  and can keep rising during the transformation
  period

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Economic growth is compatible with perpetual
prevention of damage to the environment and of
wastage of resources.

• if the total of all the physical platforms of all
  economic output remains small enough and of the
  right character physically to be compatible with
  the maintenance of everything that needs to be
  sustained, AND
• the total service flow from economic output can
  keep increasing within that constraint

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This means that once basic human physical needs
are met

• all future economic growth is generated through
  net qualitative change, not physical expansion,
  AND
• compatible productivity boosting mechanisms are
  tapped

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What is the character of the physical platform
shrinkage and change?

• A Factor 20 or more dematerialisation (for
  developed countries), and then maintenance of a
  capped quantity of materials and energy for all
  purposes (Developing countries will also need to
  dematerialise inefficient sectors and
  processes)
• The creation of a virtually closed-loop economy
  (everything recycled)
• Stabilisation of population (after gentle
  shrinkage??)
• Declining use of oil from now
• Effectively zero greenhouse gas emissions
• Full transition to renewable energy
• Sequestration of past greenhouse gas emissions to
  stay below or get below 400 ppm CO2 fast and to
  trend towards 300 to 280 ppm over time
• Major restoration of habitat for threatened
  species
• Move to zero toxic emissions
• etc.

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How can service flow be boosted in perpetuity?

• via improved qualities
• via more qualities
• that benefit the user and the environment/communit
  y
• achieving this depends on compatible sources of
  productivity growth
• and this depends on continuing innovation to
  overcome diminishing returns

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Major sources of productivity growth that neednt
drive physical expansion and can co-exist with
physical contraction

• Lean production / closed-cycle production
• Increased knowledge information intensity /
  intensified education
• Internet communications
• Fast, needs-based leapfrogging-innovation system
  driven by sustainability transition
• Whole-system design
• Green chemistry / nanotechnology / biotechnology
  (miniaturisation)
• Physical proximity (new model of urban form)
• Reduced scale therefore opportunity to mass
  produce/speed up creation of production capacity
  infrastructure
• Reduced environmental damage / reduced wastage
• Full employment
• Artificial intelligence

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Old Sources of productivity diminished by shift
from physically growing economy
New Sources of productivity boosted by shift to
environmentally sustainable economy

• Cheap physical resources and abundant supply
  (materials, energy, water, land) (But this source
  of productivity is being constrained anyway)
• Quick and easy single-purpose decision-making on
  most things (but leads often to poor/low wisdom
  decision-making)

• Speed and ease of proximity (in urban design)
• Increased skills in whole-system design opening
  up greater access to leapfrog innovation
• Necessarily ubiquitous application of lean
  thinking
• Necessarily ubiquitous application of smart
  technology and AI
• Low levels of health/environment damage
• More highly skilled workforce / community
• Reduced real expenditure on raw materials
• Drag on economy released due to low unemployment
  / underemployment

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Can the necessary short-term physical
shrinkage/change be achieved without collapsing
economic growth?

• Arguably yes, if there is sufficient innovation
  to keep boosting productivity, and
• there is enough time, so that normal investment
  levels can cover the restructuring, or
• for a short-duration transition,

• 
  there is a big enough increase in investment,
  with temporary shrinkage of discretionary
  consumption, plus really effective redeployment
  of sunk capital (cf. WW2 US)

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Theory of natural capital

• In perpetuity Natural capital as
  infrastructure with service flow ecosystem
  services and renewable resource flow
• Once-off draw down / economic take off /
  payback restoration/resequestration is the
  payback those who benefit from the drawdown
  (through economic take-off) should pay for the
  restoration (eg. fossil energy use gt CO2
  resequestration)

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Theory of rationing, ecotaxation related
instruments

• Rationing, ecotaxes ( related economic
  instruments) are regulatory tools they should
  be managed for regulatory effect in innovative
  system revenue should fall if ecotaxes are
  effective
• The way revenue is recycled from auctioned
  rations, ecotaxes etc. is critical to maximising
  productivity and minimising inflation

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How can we avoid rebound?

• Through macroeconomic management using
• rations
• ecotaxes
• tradable permits
• regulation
• Rebound is a symptom of the failure of
  macroeconomic management.
• Rebound is also a symptom of 300 year old
  institutional arrangements that cause resources
  to become systematically cheaper than labour
  intensive products (factor price problem).

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Positive correlations

• In the developed world, generally the countries
  and provinces with the strongest environmental
  controls have the strongest economies.
• In the developed world, generally the countries
  and provinces with the strongest environmental
  controls have the leading exports of related
  technologies

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Questions for workshop(following)
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Questions Framing issues

• How much development do we need for social
  reasons? (The more economic development we want
  the stronger our environmental policies need to
  be to get 100 decoupling.)
• How big and how urgent does the environmental
  restructuring program need to be? How will the
  crash program and the long run innovation
  program run?
• How do we want to position our economies within
  the world economy? - in relation to (a) the old
  business-as-usual, (b) the new business-as-usual
  and (c) the new sustainability-achieving elements
  of the economy?

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Questions Backcasting strategy methodology

• Where are we now? (judged by success principles)
• Where do we want to be, when?(with the least
  loss along the way)(based on success principles)
• What do we have to do to get there, in time?
• For an effective start, what should we do now?

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More questions for workshop session - 3

• What would an appropriate green growth strategy
  be for your society?
• What are the supply chains that make up your
  economy? How well do the end purposes and the
  elements of the supply chains fit with an ideal
  sustainability-achieving economy?
• What changes need to be made to the supply chain
  profile of your economy if it is to be
  sustainability-achieving?
• How should your economy relate to the old
  business-as-usual, new business-as-usual and
  sustainability-achieving elements of current or
  new export markets?

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Tools to help with the questions(following)
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So, where do we want to be, when?
Pulling all the issues together

• we want to be in an environmentally sustainable
  state as soon as possible, with the least loss
  (to people and nature) along the way
• exactly what that means should be determined by
  careful assessment the ideas in this paper are
  merely a crude illustration of such an assessment
  process
• the assessment process in this paper suggests
  that
• possibly we have an immediate issue to deal with
  the peaking of world oil supply requiring major
  and continuing demand reductions to rebalance
  supply/demand
• at the same time we need to make massively deep
  cuts in greenhouse emissions (down to zero?) and
  begin sequestration of past emissions
• at the same time as these transitions are made,
  solutions to other pressing environmental, social
  and economic issues should be built in so that
  timely solutions are not pre-empted and
  opportunities for economies of renewal are not
  lost this is comparable to the advantages that
  have accrued to economies rebuilding after the
  devastation of major wars

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Major end-state integrated goals

• To create an environmentally sustainable economy
  very fast
• To be the global pioneer of the full
  environmentally sustainable economy paradigm
• To create economies based on the new
  quality-driven paradigm
• Having used the low wage strategy to kick start
  economic take-off, to end the dependence on this
  strategy for driving economic growth
• To spread the benefits of the new economy through
  the whole of society

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What do we have to do to get there, in time? 1

• Educate decision-makers and innovators in areas
  of society about the need for change, the
  possibilities for change and the
  methods/technologies for change
• Build institutional capability to drive fast
  structural change to achieve an environmentally
  sustainable economy
• Proactively seek the most environmentally
  demanding customers in the global economy
• Preferentially encourage the most creative
  environmentally minded investors to be active in
  the region
• Develop very strong sustainability RD and
  innovation programs
• Make sure that all long-lived investments are
  compatible with an environmentally sustainable
  economy

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What do we have to do to get there, in time? 2

• Try to shorten the lifecycle of traditionally
  very long-lived infrastructure
• Lobby to establish international treaty
  obligations to mandate the adoption of production
  systems that are compatible with an
  environmentally-sustainable economy
• Build the most advanced environmentally
  sustainable urban systems
• Expand the domestic and regional economy and
  build it on environmental sustainability
  principles
• Build a social movement to promote the rapid
  achievement of an environmentally-sustainable
  economy

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For an effective start, what should we do now?
Catalyse change

• create methods and scenarios for the fast
  achievement of an environmentally sustainable
  economy use these for discussion ( then
  action)
• create a network of professionals to build skills
  and promote the idea, within mainstream society,
  of creating an environmentally sustainable
  economy
• Promote the Race to Sustainability program as a
  way of engaging societieshttp//www.green-innova
  tions.asn.au/Race-to-Sustainability.htm

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The principle of eco-efficiency(dematerialisation
)

• Aim for Factor x improvements in eco-efficiency
• Dont lock into arbitrary Factor 4 or Factor 10
  goals
• Calculate afresh

See Dutch Sustainable Technology
Development book
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The principle of closed-cycle

• Power with renewable energy

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Strategies/initiatives forzero waste - 1

• Physical products and materials energy should
  be managed to retain their entropic quality as
  long as possible through combined processes such
  as

• Maintenance / containment
• Repair
• Reuse (whole systems)
• Re-manufacture (component reuse plus)
• Reprocessing / waste warehousing
• Up-cycling

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A new waste hierarchy for a zero waste society
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Philip Sutton Green Innovations 19 May
2002 Version 2.e
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How can we drive the change?
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Introducing broad-based ecotaxation
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Introducing broad-based ecotaxation
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Opportunities for economic growth in a physically
constrained world
Zone of intermediation
The living world(includes humans)
The social world
Benefit
Benefit
Expansion of coverage by service ofthe
population
Improvementof service quality
Carefully manage interface
Carefully manage interface
Impact
Impact
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Managing for sustainability-promotion through
the business cycle
 

Spread new paradigm

Cost saving, risk management
Cost saving, risk management
customer loyalty measures

customer loyalty measures

Peak 2

Peak 1

Early movers explore  
Early movers

explore

Reach consensus on new paradigm

Sell new paradigm products
Start new investments
Prepare initiatives

Start regulatory taxes
Lock in initiatives
Downswing 2

Downswing 1

Upswing 1



Trough 2

Trough 1

Year X
Year X1
Year X2
Year X3
Year X4
Year X5
Year X7
Year X9
Year X6
Year X8
 
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Modelling the green growth program

• To understand proposed or real economies that are
  intended to be ecologically sustainable it is
  essential to model both the money economy and
  also the physical economy (from the macro to the
  micro level
• The green growth / sustainable economy
  transformation will involve so many micro
  initiatives that need to be assessed for their
  aggregated macro effects that new modelling
  technology will be needed
• The only technique that can deal with this level
  of necessary detail and policy flexibility is
  agent based modelling. All players in society
  will need to be able to access whole economy
  agent based simulations to test their initiatives
  to make sure that they add up to a sustainable
  outcome.

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Making the Green Growth Strategypossible
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3 stages to make the strategy feasible
Creating a mandate
Developing the mandate
Implementing the mandate
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Motivations - ethical

• Caring for local people
• Caring for future generations
• Caring for people globally
• Caring for nature, locally and globally
• For example 2400 years before current era,
  during the Warring States period, Chinese
  philosopher Mozi (??) argued that we need to act
  on universal, not partial love. Compassion for
  all life, human and non-human, is central to
  Jainism, a philosophy of even greater antiquity
  founded in India.

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Motivations (pragmatic) - threat

• Food security, risk of widespread famine
• Economic viability
• Risk of global depression, armed conflict.
• We stand in relationship to climate change and
  its consequences where people stood, in 1900, in
  relation to WW1 (and its aftermath - the
  Depression, WW2 and the Cold War).

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Motivations (pragmatic) - opportunity

• Chance for viable/sustainable development
• Opportunity to seize competitive advantage
  leapfrog to success
• Chance to build a highly innovative and creative
  culture
• Opportunity to show leadership, wisdom and
  courage.

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Strategies to promote the feasibility of the
Green Growth Strategy - 1

• Obtain a formal declaration of a State of
  Sustainability Emergency
• Develop a self-generating network of people to
  promote effective action
• Carry out widespread education training
• Work with innovators and professionals across
  government, industry and general community
• Create /or develop centres for innovation and
  strategy development link globally
• Use concurrent engineering methods (multiple
  actions in parallel) to get faster development
  and implementation of strategies.

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Strategies to promote the feasibility of the
Green Growth Strategy - 2

• Campaign to change the World Trade Organisation
  rules so that countries can discriminate against
  imports on the basis of their inferior methods of
  production
• Press the rich countries to establish a
  multilateral new Marshall Plan for large scale
  sustainability investment.

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Questions for workshop(following)
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Questions for workshop session

• What barriers do you see to a Green Growth
  Strategy being feasible in your society?
• How could a Green Growth Strategy be made
  feasible for your society?
• How can elites be engaged? How can the community
  at large be engaged?
• What combinations of motivations could be tapped
  for greatest effect?
• How can innovation and education processes be put
  into motion in your society?
• How can resources be mobilised to catalyse the
  needed transformation?

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Thank you