The fundamental principle behind Natural Capitalism is the notion that due to industrialization, which fails to recgonize the real value of natural resources, inefficiently uses those resources; wasting the vast percentage. This waste, it says, is causing the extreme deterioration of the standard of living for the world at large while benefiting relatively few. To remedy this, they are proposing a shift in the industrial model to more accurately account, both mentally and economically, for the use and replenishment of resources; since the human population is exploding and available natural resources are moving in the inverse direction. There are four main concepts to Natural Capitalism:

Radical Resource ProductivityThe current idea in government policy (for most governments) is to use the Factor Four standard (increase resource productivity by a factor of 4 in the next 10 years, and by a factor of 10 thereafter) which has really taken hold in Europe. It and the declaration which proposed it (the Carnoules Declaration) are relatively unknown in the United States. To achieve this, it will take radical changes in how products are designed and produced; not to mention the acquisition of natural resources and the disposal of waste.

Biomimicry Industrial systems need to be designed so that, as in a biological system, they can are constantly recycled and reused. To accomplish this, radical policy changes would be required. In the United States, government subsidies make it cheaper (more financially efficient) to use new resources than to use recycled ones.

Service and Flow Economy (not to be confused with a service economy). A concept pioneered by Walter Stahel (a Swiss industry analyst) and Michael Braungart (a German chemist). The general gist of this is that rather than manufacturers producing a good which has to be purchased again and again, they would provide a service which provides long lasting durables. It is extended into the Cradle-to-Cradle idea of product development, where obsolete or broken goods are returned to the factory to be repaired/upgraded/incorporated (aka recycling). This would, in theory, stabilize the economy because the consumer would be purchasing flows of services rather than single goods.

Investing in Natural Capital This is basically the concept of stewardship. It asserts that societies need to adopt the mindset that continued decline in already scarce resources not only threatens the people who rely on that single resource, but can threaten the security and prosperity of the whole. (see how Sadam Hussien used water to control the population of Iraq.)

Source: Natural Capital; Paul Hawken, Amory Lovins, & L. Hunter Lovins.

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