Colloqui di Martina Franca 2014 "Quale Economia per quale Benessere" - Pre-conditions and constraints on the way towards a green industrial revolution.

1. “Quale Economia,
per quale Benessere”
22/24 maggio 2014
J. Daniel Dahm
Strategic transformations
towards sustainability.
Pre-conditions and constraints on
the way towards a green industrial
revolution.

2. 2
Foul credits
Economical (monetary) productivity was purchased on ecological credits, and
ecological productivity was sold without consideration of its reproductive
premises.

3. “Quale Economia,
per quale Benessere”
22/24 maggio 2014
Correlation between the stability of ecosystems, CO2-concentration and climatic changes,
scenariocalculation, Potsdam Institute for Climate Impact Research, 2008

4. 4
Dr. J. Daniel Dahm | jdd@sustainability-strategies.org
rethinking
Economy

5. 5
New challenges calling for Sustainable Business Cultures
The variety of life, the productivity and regeneration cycles of energy and material on
planet earth are indispensable for the evolution of life and cultures, as well as for
economical development.
Economy and ecology are inseparable; they are intrinsically tied together.
!

6. 6
1. Adjustment of the regulatory framework and the policies of order for
the economic practice
2. Establishing new competitive business models
3. Changing social norms towards sustainability
4. „Empowerment“ of the agents of change (especially civil society ...)
Need for change

7. 7
Adjustment of the regulatory framework and the
policies of order for the economic practice

8. 8
1. Abolishment of the distortion of competition by (hidden) externalisation of ecological and social costs by
production processes, value chains and logistics.
2. Legal prevention of the commons equivalent to the private property.
3. Enhancement of the requirement to publish results of companies and emitters of financial products towards
the comprehensive documentation of their ethical and ecological impacts and potential sustainability risks.
4. Implementation and standardisation of ecological, social, cultural and measurements and ratingmethods for
companies and investments.
5. Establishing of incentive structures and removal of barriers for sustainable (direct-)investments especially for
institutional investors;
6. Obligation for all emitters of financial products to document comprehensively all risks, including the risks for
commons goods;
4. Limitation of speculations on the coverage of business activities related to the real economy;
5. Readjustment of the practice of credit accomodation of banks and all non-state financial institutions
(monetary financial institutions (MFI), Hedgefonds and similar future constructs)
6. Implementation of a financial transaction tax.
Adjustment of the regulatory framework and the policies of
order for the economic practice

9. 9
Establishing new competitive business models

10. 10
The
SUSTAINABILITY-ZEROLINE
– a severe Sustainability Benchmark
Source: J. Daniel Dahm, 2014
SUSTAINABILITY ZEROLINE

11. 11
Development of the Sustainability-Zeroline-Benchmark
Source: J. Daniel Dahm, 2014
SUSTAINABILITY ZEROLINE

12. 12
SUSTAINABILITY ZEROLINE
Source: Global Footprint Network 2010,
modified by J. Daniel Dahm, 2014
The Sustainability-Zeroline is a refinement based on the image of the “Overshoot”
by the Global Footprint Network 2010.
The Sustainability-Zeroline defines the fictive status of a total equilibrium of global
biocapacity and global ecological footprint as “zero-line-benchmark” – the
minimum requirement for sustainability (that is obviously not fulfilled).
Development of the Sustainability-Zeroline-Benchmark
Abb. 1!
Abb. 2!
Source: J. Daniel Dahm, 2014
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
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Biocapacity Ecological Footprint
Capacity
Demand
SUSTAINABILITY ZEROLINE
Biocapacity versus
Ecological Footprint

13. 13
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
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Biocapacity
(Capacity)
Ecological
Footprint
(Demand)
Capacity minus
Demand
Overshoot
SUSTAINABILITY ZEROLINE
Biocapacity (CAPACITY) versus
Ecological Footprint (DEMAND)
Development of the Sustainability-Zeroline-Benchmark
The Sustainability-Zeroline provides an easy visible and comprehensible
way to understand the relation and the disproportion between
supply and demand for the ecosystem of the planet Earth.
If the full capacity of the planet is equal to the full demand of mankind
we have a kind of conservation of nature and natural resources.
An ecological rebuild of our livelihoods is impossible with this,
because the build-up potential of nature is completely absorbed. But
– at least – we as mankind achieved a state of rest.
Compared with today that would be already a great improvement.
But if the demand (by economic activities and consumption) exceeds
the supply of the ecosystem we experience an overshoot which is
potentially deadly for our livelihoods – like “biting the hand that feeds
you”.
This situation mankind achieves since the early 1990s every year. Still
– it is often misunderstood as growth.
To overcome this fatal development and cognitive dissonance it is
important to make this matter of fact easy to understand, like a profit
and loss statement for our plant and our future.
The Sustainability-Zeroline allows this.
Abb. 3!
Source: J. Daniel Dahm, 2014

14. 14
The Sustainability-Zeroline-Benchmark
– Geo-Biosphere and Anthroposphere (cumulated)
Source: J. Daniel Dahm, 2014
SUSTAINABILITY ZEROLINE

15. 15
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
Build-up (incl.
internalisation +
compensation)
Externalisation
SUSTAINABILITY ZEROLINE
Sustainability-Zeroline-Benchmark
Geo-Biosphere Anthroposphere
(relative)
Abb. 8!
Source: J. Daniel Dahm, 2014

16. 16
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
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Build-up (incl.
internalisation +
compensation)
Externalisation
SUSTAINABILITY ZEROLINE
Sustainability-Zeroline-Benchmark
Geo-Biosphere Anthroposphere
(total)
Abb. 9!
Source: J. Daniel Dahm, 2014

17. 17
New needs
New forms of co-operative actions and value creation are needed with a shared idea of
competition on the base of sustainability.
Future targets are the renaturation of degraded landscapes and ecosystems, as well
as strengthening the development of infrastructures for basic needs

18. 18
The right of the Commons #3
All humans have the right to utilise commons for their individual (private) and
collective purpose, without exhausting or damaging them.
The right to use them has to be connected with the obligation to preserve the
commons.

19. 19
Therefore it is crucial, that the legislative forces a sustainable,
commons-sensitive economic order.
Externalisation has to be banned by law as impure distortion
of competition.

20. 20
„The invisible hand of the market is invisible,
simply because it doesn ´t exist.“
Joseph E. Stiglitz, Chief Economist of the World Bank and Nobelprice for Economy

21. 21
System failures
The financial crisis is resulting from
A) the ongoing total expansion of financial capital and private interests, and
B) a bio-destructible competitive environment.
Both together led into an ecological crisis, affecting all life-forms on earth including mankind.
The financial system and its credits did grow far over the productive and reproductive
capabilities of natural and social capital.

22. 22
Externalisation and economy
Annual environmental cost and market risks

23. 23
Need for adjustment: Sustainable Markets Sustainable Investments
The last decades did distort, what a market economy could be.
To narrow markets towards an expansive financial capitalistic idea of short-term maximisation of
commerce and financial profits is alien for an intelligent concept of a market.

24. 24
Institutional investors face major challenges
§ Feelings of insecurity abound amidst extreme investment scenarios.
§ Traditional asset classes currently bear high risks:
§ Bonds do not hedge against inflation at historically low interest rates,
§ stock volatility hard to bear given strained risk budgets.
§ Investors increasingly consider absolute return approaches and alternative asset classes.
§ Sustainability is a global mega trend and chance of problem solving.

25. 25
Current situation regarding liquid asset classes
Stocks
High volatility makes risk and return forecasts more
difficult.
Globalisation leads to increasing correlation within
the asset class.
Crises increase correlation of stock and bond
markets.
Bonds
Low returns reduce attractiveness of asset class.
Increasing risk of inflation devalues nominal
claims.
Growing default risks even of government bonds
aggravate asset liability management.

26. 26
Can alternative asset classes solve the problem?
Example:
Precious
Metals
• Already high price level
• Insecure long-term price trends
• High volatility
• No current pay-outs
Example:
Hedge Funds
• Lack of transparancy
• Image problems
• Regulatory interventions imminent
• Disappointing performance within crisis
Example:
Private Equity
• High risks
• Bidding competitions
• Unreasonably high price level
• Stable and predictable demand
• Barriers to entry for competitors
• High price inelasticity
• Growing demand for organic agricultural
products
• Growing demand for sustainable timber
products
• CO2-compensation as add-on
Example:
Infrastructure
Example:
Timber
Agriculture
Example:
Real Estate
• Eco-trend offers competitive advantage for
green buildings
• Predictable long-term cash-flows

27. 27
Transforming financial capital into real capital

28. 28
What is needed: investing in real values
¡ Sustainable investments are build to last. Its projects and investments are long-term.
Its business is sustainability.
¡ Sustainable investments are targeting sustainable infrastructures: solar/wind/water
power, sustainable timber production and reforestation, biodiversity and renaturation,
water desalination and purification, social ventures and education, clean tech and
intellectual property, etc., thereby creating values and assets in the real economy.
¡ Sustainable investments are offering stable and risk reduced returns. No leveraging,
minimum of financial market correlations.
¡ Sustainable investments are harnessing the potential of local communities, civil
society and combine them by sustainable intelligence.

29. 29
Offering stable performance by harnessing sustainability

30. 30
Performance advantage: stable cash flows, optimal risk
reduction, strong sustainability
§ Demand-oriented, concrete benefits for people, communities and localities, serving energy needs;
§ Non-subsidy-dependent revenue streams through energy providing via Power Purchasing Agreements (PPAs) enables positive
correlation along energy price development;
§ Geopolitical diversification of real infrastructure assets along optimal climate-ecological, political and socio-economic criteria
leads to superior risk-revenue ratio;
§ Wealth-preservation by back coupling of financial capital into sustainable real capital;
§ Returns from utility generation and consumption;
§ Investment in real instead of nominal capital and high-potential infrastructure minimises risk;
§ Integrated Sustainability Approach (ISA) reducing investment risks by empowering civil society, strengthening locational factors
and stabilising local ownership;
§ Creating economic commons with full stakeholder involvement (employees, civil society organisations, communities, local
business sectors, educational institutions, policy makers);
§ Distribution of fair stock ownership through multishareholder-strategy

31. 31
CURRENT APPROACH
INTEGRATED SUSTAINABILITY APPROACH
• EXAMPLE: Build 20MW photovoltaic power plant
• Treated as isolated project, planned/managed by specialised
contractors without sustainability expertise
• Electricity is fed into grid at highly subsidised tariffs, irrespective of
actual demand
• Project driven by individual profitability approach
• EXAMPLE: Develop 20MW integrated solar energy solution
• Combination of smart-grid enabled central and decentral renewable energy sources for constant power supply
and integration of several end-products improves overall quality.
• Pooling of value-added steps of Integrated Sustainability Approach (incl. CO2 compensation and certification),
increases ROI and builds sustainable infrastructures.
• Requires sustainability trust
INTEGRATED SUSTAINABILITY SOLUTIONS CREATED BY UNITED SUSTAINABILITY
INTEGRATED SOLAR ENERGY SOLUTION:
• Solar thermal unit (day night) with 20MW
capacity
ENERGY USED FOR:
• Saltwater desalination
• Supply of Freshwater for local population
and agricultural use
• Piping Infrastructure, Irrigation Systems
• Land improvement (Combating
Desertification) by Soil Fertilisation
• CO2 Compensation and CO2
Certification
• Electricity infrastructure supply for
regional urban areas and Industries
• Energetic Storage Capacities
Optional Scaling: Combination of
decentralised residential and commercial roof-
top photovoltaic through software and Smart
Grid solutions to form a Virtual Power Plant
CO2
United
Sustainability

32. 32
Integrated Sustainability Approach by empowering people

33. 33
Investment (i.e.
energy
infrastructure)
Community
other
stakeholders
Local
companies,
service
providers, civil
society, policy
makers, ...
Power
Purchasing
Agreements
Education,
Employment,
Empowerment
Exit via
democratic
ownership
model („privates
to „commons“)
Multi-stakeholder-
+
Multi-shareholder-involvement
INTEGRATED SUSTAINABILITY SOLUTIONS CREATED BY UNITED SUSTAINABILITY

34. 34
„Empowerment“ of the agents of change
(especially civil society ...)

35. 35
Urban subsistence – a principle of economic (dis)order

36. 36
Michelle Obama does it, her husband too. The First Lady invented a garden at the White House, it has
beeyards, she promotes community gardens. The US-President brews his own beer with the homemade
honey. It is a Honey Brown Ale, the recipe is published by the White House as open source, and it says
that it is not so bad.
Urban gardening, do-it-yourself, the self-made-revolution are the green topic of the feuilletons of the
last two years.
In Germany a political party puts open source and self-made politics on top of their agenda.
In Greece they self-made meanwhile entire hospitals.
The economy changes: classical consumer are becoming prosumer, who co-design and co-produce.
something ´s different

37. 37
The term subsistence comes from the latin word „subsistere“ = to resist/to sustain.
Often subsistence is still associated with material minimal production of economies of poverty.
But it is much more.
In the subsistence economy – via subsistence work – great shares of the re-production and
regeneration of natural and social commons are achieved. innovation processes and cultural
creativity are mainly stimulated in the sphere of subsistence.
Urban subsistence is the urban form of self-supply. It is more
service oriented than the rural agrarian subsistence, but is
material as well as immaterial productive.

38. 38
Subsistence economy is not individualised
but co-acting and co-liberal.
It is an economy that is able to resist, to last.
It is genuinely sustainable.
Subsistence economy is needs-oriented,
dynamised by the demands
and is created out of own power.

39. 39
„The urban cicil society follows implicit civil rules, which also shape its own
economic order - the (civil) subsistence economy.
It does not follow the logics of financial capital, of rivalry and competitive
pressure, and it is not governed by offer, but oriented on the needs.
I call it urban subsistence, that is the urban economy of self-supply and self-
sufficiency.“
J. D. Dahm, 2002

40. 40
The research results are leading to some impressive key datas, that may clarify additionally which dimensions of value
creation are achieved in urban subsistence.
On base of the researches we could calculate:
for Cologne ca 2,5 million voluntary working hours in civil society organisations for the whole community;
for Stuttgart ca 1 million voluntary working hours in civil society organisations for the whole community;
On base of the available statistical datas and the research results form the cities of Cologne, Berlin, Stuttgart, and under
consideration of the Freiwilligensurvey-Study from 2005 we come to the following amount:
for Germany around 5 billions hours unpaid, voluntary urban subsistence working hours per year,
carried out nationwide by over two third of the citizens.
....essential efforts

41. 41
The economic dimension of the civil society builds in many perspectives
the undercover base of many market-based processes, which do often
harness unnoticed the performance of the urban subsistence.
The future of cities will grow out of a complementary, reciprocally fruitful
exchange of market, public and civil society efforts.

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Changing social norms towards sustainability

43. 43
Empathy and Freedom - The ethical base
Empathy and Freedom seem to be adequate to serve as pure ethical base for economy.
Taken such a norm for serious, it strengthens our argumentation: Debates about the logic
and necessity of war, of hunger and prosperity gaps, of the conflict between man and
nature are baseless.
Its about a contest for the best sustainability strategies for new endeavours.

44. 44
The time is now to act – towards Sustainable Business Cultures.

45. 45
Banksy „Wet Dog“
Molto gracie - thank you very much !
Dr. J. Daniel Dahm
jdd@sustainability-strategies.org