Solving the ocean’s tragedy of the commonse

Playing the Fish Banks game in a group of Industrial Ecology students proved to be an interesting contradiction. A group of people striving to become change agents in a world full of depletion of natural resources. I had played the game once before, also in a multidisciplinary group filled with philosophers, biologists, economists you name it. The funny thing was, both times I played the result was exactly the same: the resource system collapsed. One could argue the IE group is filled with a bunch of hypocrites.

One could also argue that the bible was right and humans are inherently bad and give in to greed, no matter their profession or ideals. Or maybe Herbert Spencer interpreted Charles Darwin’s “the origin of species” correctly where he pleaded for governmental interference and legislation. Also, maybe the culture of ‘doing the right thing’ among the IE students was not strong enough.

One large problem I saw was the level of distrust as result of lack of communication. Although every  team new the sustainable amount yield of fish, people were looking around at other groups and trying to read body language in an attempt to infer if others were abiding to “the environmental rules”. As time passed, distrust grew along with impatience, and people started taking chances. Also, there were neither control mechanisms or legislation to insure the oceans would not be fished dry.

Andersson and Ostrom advocate the importance of decentralizing governance. To govern a process that can provide incentives to users to safeguard the long-term delivery of a variety of goods requires multilevel governance arrangements. These arrangements rely on the explicit recognition that incentives at some scales may be incompatible with goods and services produced at a different scale.

Furthermore, the key to effective governance arrangements lies in the relationships among actors who have a stake in the governance of the resource.

According to Harding, the great challenge facing us now is to invent the corrective feedbacks that are needed to keep custodians honest. We must find ways to legitimate the needed authority of both the custodians and the corrective feedbacks. Mutual coercion is the key to legislate temperance.

My proposition:

One member of every group gets chosen to become part of a counsil. Everyone gets democratically chosen in order to insure only trustworthy members get elected.

To be continued…

Networks – The Kalundborg Symbiosis

As I am studying industrial ecology and painfully have no background information the frontrunner in the field of industrial symbiosis, I chose to look into Kalundborg, Denmark. The website tells me it all started with a private conversation between a few enterprise managers from the Kalundborg region in the ‘60s and ‘70s. Esso needed water for their their refinery near Kalundborg and built pipes nearby a lake. Gyproc (a local gypsum production enterprise) got an agreement with Esso and started to use their excess gas for drying plasterboard in their ovens, and later Dong Energy was connected to the Esso (now Statoil) water pipe. Over the years more and more businesses were linked into the Kalundborg Symbiosis, but what type of networks made this evolution possible?

An article in the Financial times in the ‘90s sketched the following analysis of Kalundborg: For the industrial symbiosis to work different parties have to be physically close together in order to create economic feasibility and other positive externalities. They are sharing power, gas, heat and are in constant geographical development which makes it a greenfield industrial complex, but are also always improving which makes them more of a brownfield industrial complex. Reading further into the ‘90s newspaper I notice that Kalundborg has a small town. Everyone here talks to each other, which has led to a growing network constantly bridging structural holes. The paper goes on and describes the need for transparency and being able to look into each others businesses to be able to take advantages of opportunities. Due to high environmental pressures from the government the transparency increased because people started to realise that not only could they benefit economically, but also environmentally and meet environmental legislation demands.

In Kalundborg, each new swap or trade is negotiated independently, and sometimes one offers to pay for the new infrastructure if the other offers a good price for its excess goods. The funny thing here is, people strive for increasing resource dependency in order for both parties to gain profits, where usually companies try to reduce dependency in order to gain market power. I get the impression that the municipality acts as a catalyser, and in doing so it is said they play an active role. However their website is in Danish and I cannot find any information on the process of selection of different new companies who aim to join in. I know that regional clusters are constantly growing, and that the Kalundborg municipality takes an active part in the transition to a climate-friendly and energy-efficient society independent of fossil fuels, and are focused on utilizing and testing feasibility of new green technologies. Looking at their community website, I see many initiatives by the both the municipality and by the national government to bring together  decision makers, business representatives and experts in the quest for sustainable solutions and green economy models. Everything indicates a pro-active role and the support of the introduction of innovations and new companies as a pose to a defensive one. Also, the website says the municipality constantly re-assesses its goals  and policies whilst and adapting them to the industry needs, indicating a rather bottom up strategy and a network where other actors have the ability to influence public policies.

It is evident that all three types of regional networks strongly exist. The agglomeration: firms are located near to each other based on positive externalities resulting from clustering, and are a definite result of self-organization. The Industrial complex: firms have developed and are increasingly developing numerous resource networks and stimulate their suppliers/customers to co-locate, and Social networks: through increased interaction, managers of firms located in proximity develop social capital such as trust and increase their transparency towards one another. I realise that no constraints have been identified in this blog, which is probably why Kalundborg is so far ahead of the growing number of initiatives in the world.

Feedback Assignment #4: Laurens B

Hi Laurens,

First of all, great stuff on the intro. Between the lines I can read this stuff actually means something to you, and creating a link on the word ‘suicide’ to back  your statements really makes a strong starting point. Also creating structure makes the article quite readable.

I agree with you that Nokia’s intentions are great and the sandwich approach that Nokia takes is an effective way to communicate. However, do you think the approach will lead to a sustainable implementation?  The supplier has shown how easy it is to bend the rules provided by the Chinese government and how willing they are to do it. In your eyes, a yearly check-up will create a sustainable change solely due to “not losing face” or “jumping because Nokia tells them to” . Partially you might be right, but maybe a little optimistic in my point of view. Maybe an idea to take another look at the articles provided.

I also agree the Chinese government should better permit their permit requirements. I also somewhat agree with the points mentioned below and they are interesting, except I think we are looking at this case more through the eyes of Nokia. Your proposal is for the government to simply implement some new regulations like lower taxes for ethical behaviour (an arbitrary topic), but it is already evident that the supplier is willing to bend the rules. Would this not continue? And who would be the party controlling the supplier on their ethical behaviour? Maybe you could go into a bit more detail on your proposition.

Please keep up the energy with which you write! If you have any question or disagree with me please let me know. Good luck with the rest of the blogs,

Jochem

Feedback Assignment #4: Jody Milder

Hi Jody,

I very much enjoyed reading your blog, especially since you make it very accessible and easily understandable. Also the structure is clear.

I also enjoyed the fact that is very much written from own experience, I only wonder if this may not be a bit too much. I seem to be missing some background information from the articles provided. Maybe you could elaborate a little on the possible effect on Nokia from geographical boundaries as a pose to industry boundaries? You clearly feel the factoy only has to apply the regulations provided by Chinese government and culture, but what if transparancy on the way the factory works has a negative effect on Nokia as a brand? I feel although not mentioned explicitly Nokia does self-assessment, do you think this is an effective and sustainable way? And do you think the funds on corporate sustainability assessment they have agreed to sign would agree with you in the fact that Chinese standards are simply different from western standards? I think they mention in the documentary that they can not afford to lose these funds because of the negative effects. You might want to look into that.

Hope this is helpful, these are only my thoughts. If you do not agree or have questions please let me know!

Jochem

Nokia – A Decent Factory

After watching a documentary on Nokia and it’s strive to uphold their sustainibility criteria throughout the entire supply chain, a couple of questions have to be answered:

• How are the two key organizations in this case (Nokia and the supplier) striving for legitimacy?
• is the approach taken by Nokia an effective way of diffusing sustainability criteria?
• How could another coordination mechanism improve on this?

To be able to analyse how Nokia strives for legitimacy we must first define what legitimacy as a critical resource is. It can be seen as the extent to which the activities of a firm ‘are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions’. Due to the mechanisms of coercive isomorphism, Nokia has to keep up with formal and informal pressures exerted on them, especially those from the western society. A growing topic here is the focus on corporate social responsibility and doing things ‘the right way’.

Nokia has not incorporated an environmental management system, nor do they have a well-structured or planned strategy when it comes to corporate social responsibility. When it comes to the assessment of these themes within their walls, they are on their own.

A first step Nokia has taken is become part of the Dow Jones Sustainability Group Index and the FTSE4Good funds. These include an in-depth analysis featuring 80-120 questions on financially relevant economic, environmental and social factors or in other words: Corporate Sustainability Assessment (CSA). In doing so, Nokia has accepted a potentially dangerous challenge: not meeting the requirements of CSA would mean being dropped from the CSA mark, which in these transparent times could have negative consequences. These are examples however of coercive isomorphism conform the standards of western society. But as shown in the case about Nokia, they outsource some of its production to China. In my point of view, this is the core of a clash between mechanisms of isomorphism which are both coercive, but are separated through geographical boundaries. And as the Chinese supplier is an actor in Nokia’s supply chain, negative information becoming public will definitely be of influence.

The executives of Nokia are fairly new to self-assessment on the topic of CSR, they have hired a consultancy firm to assist them. Together with the consultant, a representative of Nokia travels to China to investigate. This way Nokia tries to apply pressure to the supplier in an effort to implement its sustainability criteria. The consultant is more experienced and has quantifiable and direct questions and messages in order to achieve its criteria.

The Chinese supplier has a total different approach while striving for legitimacy. As a matter of fact, it doesn’t actually strive for legitimacy at all. Most of the pressure performed here is by the Chinese government, but the supplier makes it quite clear how easy it is bend the rules. They have identified numerous rabbit holes such as not using any contracts and creative accounting techniques in order to make it seem like for instance labour does not exceed the maximum or that workers are actually earning minimum wage. During Nokia’s visit strategically make it seem they are transparent, yet they carefully select workers allowed to speak to the visitors and other examples. When they start getting negative feedback about things, they remind Nokia about the different cultural values and norms in China. In the end, Nokia shares the positive and negative findings and point out where there is room for change for the Chinese supplier.

Obviously, this is not a sustainable way in creating change and realizing the sustainable criteria for which Nokia strives. Large investments in terms of time and money will have to be made to continue this way as a self-organising corporation. An option that Nokia has is to perform pressure on its supplier to become part of the ISO 14001 certificate. This way a third party will be responsible for upholding the standards of Nokia. A downside of this is the costs for a project like this can vary greatly and rise quite high. But seeing the supplier allowed Nokia to visit, they are probably very reliant and the power is on Nokia’s  (the buyers) side, not on the supplier. Nokia could use this power to split the costs for ISO 14001 certificate or even threaten to switch supplier if they do not agree and make them pay for it themselves.   This is necessary because evidently the boundary conditions of money and trust are simply not enough.

Feedback Assignment #1: Spyros Ntemiris

Spyros, great choice of paradox and very well structured and written. You kept it nice and global for the CO2 emissions tax part. Great stuff mentioning the geographical boundaries and how industries avoid taxes by switching countries. When you take a second look at it maybe you can add shortly how the ETS is in currently in crisis partially due the economic crisis and a reduction in production and energy use leading to a depressed carbon price.

The last paragraph in my opinion distances itself a bit from the rest, seeing it covers a different topic. This looks to me more like an LCA or MFA and a cultural/lifestyle paradox and has less to do with the legislation and policy mentioned at the beginning. If you generalize it a bit more i think it would become a bit more relevant.

I would love to add more feedback but this is all I can come up with at the moment, let me know if you disagree of have questions. Good luck with the rest of the blogs!

Feedback Assignment #1: Florentine Brunner

The puzzle you have chosen is very interesting since it speaks directly to the individual, and it is something we as IE students probably all think of in our daily lives. I enjoyed your transparent and open way of writing on the topic, very accessible and fun to read! I do have some remarks, hopefully they are of some use!

“We all know that we should save… to name only a few.”

• Who is we? Is it western society? Everyone on earth? If you mean the second one this might not be true. Do you have a reference for this statement? If the graph is based on scientific research, maybe it is a good idea to include a reference and define the boundaries. Above the graph it says “the individual’s awareness”, so is the graph about how aware people are or the increasing number of people becoming aware of environmental problems?

“Such an impact is that consuming sustainably in fact is expensive.”

• Good point that the individual expenditure is part of someone’s lifestyle, but to me it looks like the rest of this text is more about marketing technique and the debate between conventional and ‘green’. Maybe end this section with how this affects the individuals lifestyle?
• I very much agree that the cradle to cradle concept can produce impact, but this also does not have much to do with harm to lifestyle. You address the fact that sustainability has to do with lifestyle thus it is a cultural challenge due to individualisation, growth in technology use, globalisation etc. Lifestyle has to do with different scales: individual, group, public and great society. You can look for some literature by Ulrich Beck on the topic. Maybe you can say something short on every scale or narrow the general statement down from “changing behaviour” to for instance “changing their consumption behaviour”, seeing the current problem you have found is so broad.

“No direct feedback on our actions”

• Very clear and complete, and I thought the example of German house owners and solar panels made your point very clear.

“Overflow of information”

• Also a good point, and I couldn’t agree more. There is no handbook on which course of action is best to take when it comes to household applications, and with everyone making different statements it is a great struggle to do the right thing.

A couple of minor spelling/grammar remarks:

• (While the gray curve represents what I would the correlation expect to look like à switch “the correlation” and “expect” around
• As I belief = as I believe
• an production = a production
• However it is obvious that only the consumers can force industry to implement such concepts by becoming aware of his responsibility and making the right decisions à consumers = his?
• interpreted buy the market à buy = by
• No prove = proof

These are only my thoughts, please let me know if you disagree or have any questions! Jochem

Week 2: My position on the Friedman-proposition

“What does it mean to say that business has responsibilities? Only people have responsibilities” – Milton Friedman.

The american economist Milton Friedman truly believed in a free market, with privatization, deregulation by the government and cutting down on social expenditures as the three important pillars. Next to being the economical advisor for Ronald Reagan, he was a libertarian but also a Republican. This seems to be quite a controversy. But going back to the quotation, he argued that corporations have no social responsibilities, only maximizing the profits for it’s shareholders.  These statements and ideologies have been true in many cases for a long period of time in our western society, especially during his own lifetime. But ‘the times they are a changing’ as Bob Dylan once sang.

One of the reasons for this change is transparency. A cause for this transparency is the possibility of communication through social media and reaching large amounts of people with one click of a button. Large companies producing in low-wage countries to be able to cut down prices and not paying attention to the social and environmental impacts of their actions are easier to draw attention to. An example of this is Primark, who exploited its labour force in Bangladesh leading to a large collapse of one of its factories. The world quickly hears of this, as it does with other examples.

In my opinion Friedman was an old-school capitalist. We can refer to the type of capitalism needed as ´conscious capitalism´. Increasingly consumers are looking further than the price of products and value companies who excess in corporate social responsibility such as B-corp (Benefit corporation). A shift is needed where businesses no longer live in a bubble and are part of the community, and are not scared to lose money in order to accomodate it’s ethics. An economy where more non-for-profit organizations pursue business-minded strategies and engage in social enterprises, instead of old-school capitalists who don’t think about the future generations. I believe government deregulation is possible in such an economy, where the primary task is catalyzing social and environmental business. Businesses hanging on to solely for-profit strategies will become obsolete and out of touch with community and will not be able to meet the needs of consumers. Thus, due to groing transparency the government influence becomes less important. So in one way Friedman was right: people do have responsibilities, and as people are the backbone of a company as well as the consumers, so do businesses.

Wel regulieren, friedman te kortzichtig in dat alle vrije markten werken, voorbeelden zoeken waar het niet werkt, overheid controlerende funtie

Week 1: “The business of business is to increase its profits”

To most industrial ecologisy students this sentence should raise the hairs on the back of their necks. To me the sentence is simply  incomplete and incorrect. Although businesses are mostly prevalent in a capitalistic economy and for-profit, the may also be not-for-profit or state-owned. NGO’s for instance can be classified as a business, but have other goals than making money. I would like to replace the word “profits” with the world “value”. Creating value is applicable to every type of business or firm, and can be interpreted in many ways. One example is increasing customer value: The difference between what a customer gets from a product, and what he or she has to give in order to get it. A business can profit from an increase in customer value in the form of customer loyalty or attracting new customers. Even humanistic not-for-profit organisations or “businesses” enjoy customer value and loyalty because it gives them more opportunities to reach their goals.

Week 1: Choose your own industrial ecology-inspired puzzle and think up three alternative explanations for it.

Hi Sheila, can you print five copies of the attached file? Cheers, Bob

Early 1993, e-mail started being used for exchanging digital messages to one or more recipients. Not only e-mail, but all sorts of forms of interchanging and sharing of data was taking its rise. Some would argue this increase is a good  thing: it leads to less paper consumption. And as 90 percent of today’s paper is made from wood fibre, this would ultimately reduce the pressure on the world’s forest ecosystems. This is where an interesting paradox comes into life: in contrary to the expectations that the use of computers, e-mail and the internet replace the use of paper and lead to a decrease in usage, the opposite is happening.

Clark and Foster (2001) refer to this phenomena as the Paperless Office Paradox, which suggests that the development of substitutes for particular resources may not lead to a reduction in consumption of those resources and in some cases may actually lead to an increase in consumption. Another important paradox is the Jevons paradox, which suggests that in some cases improvements in efficiency do not necessarily lead to a reduction in resource consumption. One could argue this is the case for the use of paper. Combined the two paradoxes show that a greater efficiency and the development of a substitute for a particular resources often lead to an increase in use of the resource instead of a decrease. As the graph above shows that although the recycling of paper is taking rapidly increasing, so is the annual paper consumption, but in an even higher tempo. The next graph shows the rapid increase in digital information created each year on a global scale. Although this can be seen as a substitute, it could arguably be a reason for extra growth in the use of paper.

One possible explanation for the increase is the cultural aspect of paper. The use is rooted so deep into the lives of people all over the world that they don’t know how to live without it. Many people will still prefer to read a paper book, have the possibility of a coffee stain on their homework or be able to make notes on graphs presented in a meeting. People are used to being able to highlight pieces of text with an actual highlighter pen and scribble and make markings on their articles. And because getting hold of the documents needed has become so accessible, the printer is only one click away. There is a strong coevolution between work, private life and paper, and as the graph below shows the number of emails, photos and other forms of data is shooting through the roof. Take photos for example, sharing them and making them together can take less than two seconds. People still want tangible photos due to for instance emotional value. People are exchanging much more information, but neither technology nor behaviour have caught up. The previous examples are examples why cultural, psychological and technological factors explain the paradox of the paperless office, but what about the economics?

Especially in organisations and industries this could be explanatory. Here the printing costs are minimal compared to investments needed in substitute technologies, so the adoption of such substitutes might go at a slower rate than the growth in use of paper that the current technologies may cause. Especially in offices printing is often viewed as cheap or sometimes even “free”, resulting in a lack of incentive to withhold form printing.

Importantly, I agree with Greg Gibson, who is in charge of North American office paper at International Paper, the world’s largest paper maker. He argues that the paradox of the paperless office is a “generational thing”. Older people still prefer hard copies of most things, where younger workers are increasingly comfortable reading on screens and storing and retrieving information on computers or online. When the older workers make way for new generations leaving university who are much more used to having everything digitally stored, both generations will take their habits with them, eventually leading to a decline in the use of paper.