Why are cities overflowing with waste – Part 1: Material balance of a city, The organic waste

© Ajay Phatak, Think2Transform, Pune India

Remember: Mass cannot be created nor be destroyed– Law of conservation of mass.

One of the most challenging problem that every city faces today is that of Solid Waste Management.  May that be organic wet waste, plastic and packaging dry waste or eWaste.  The quantity of solid waste continues to increase as much as the local governing bodies are trying to address the disposal and clearing of such solid waste.

Every citizen is most concerned that no waste should sit in her backyard.  Seldom a citizen cares about the ‘life cycle’ of this waste.  How is waste generated and why do cities have this ever-expanding problem.   Generally, citizens blame the city government, themselves or just accept the situation and live through it.   Why is it so that this problem has not been satisfactorily solved in any of the large cities worldwide in the last 100 years since the consumerist society was born in the roaring ‘20’s. 

Let us use the law of conservation of mass to understand this problem better, let us take a simple first-principle approach:

material in = material out + material stored

This is a the basic law of conservation of mass.  Once we start looking at this equation carefully, solution might start dawning on us.  Stored quantity of material will only grow a bit, however, it can be considered constant over a period. Only way for any new input material through purchase of new goods not to accumulate in our houses is to move the older goods move out of our houses – and that happens as we discard this as trash day in and day out.  Whether that trash is in the form of plastic dumping, or dumping the vegetable and fruit remains, or additional cooked food not consumed is disposed, is immaterial.  All the excess material being put out of our houses very day will certainly appear as waste. 

Once we realize that simple material (im)balance is the reason why this waste appears all over the city, we should turn our attention to basics again to understand the possible remedies.  We will focus on the organic waste part of this equation in this blog.  Considering we should never mix the 2 streams – something that can be absorbed and used by the biological cycle and once that should remain ideally in a closed loop – the loop of technical nutrients, emanating from the Industrial world.

We as a question why does such imbalance occur? 

The simple equation:

Input = Waste + accumulation + Consumption

Provides a good insight into solutions as well.   We have 3 levers to play –  Input, Consumption and Accumulation to try and minimize waste. 

Unfortunately, there is almost no material, which gets consumed.  We land up generating sewage as we continue to consume food.  We also throw away excess food cooked and refuse, part of the biomass that we cannot process. The sewage, which has much of the nutrients required for our food to grow again, in principle must go back to the soil, from where the food was produced.  This will ensure that the nutrients are returned to the soil for the next cycle of food to be produced.  That, this feedback loop is absent, we need to feed the soil with external nutrients. Typically, these will come from chemical fertilizers.  Any excess fertilizer input to the crop means that the excess input gets carried through in  agricultural run-off and into the water streams while the rest is assimilated in the crops we produce.

All the food items that come into the city are typically imports from the nearby villages. The aftermath of our food consumption in terms of fruit and vegetable refuse or sewage, which has the organic matter imported from the villages is rarely given back to villages.  We try and find urban solutions to something which must be returned to villages if we want to ensure material balance and natural cyclicity of material movement.  If this output in terms of food waste, fruit & vegetable refuse as well as sewage is returned to the soil and to the village which grew the food for you in the first place, there is a good chance that the additional nutrient required by the soil in the villages in terms of chemical fertilizers can be reduced substantially.  It is important to understand that the NPK and other micronutrients circulating in the part of the food web today, are far more than anytime what has been in the history.  This is simply by looking at the chemical fertilizers used to boost the productivity of the crops consumed by humans.  With amount of food produced exceeding the needs of humans already (even while just distribution is certainly a question mark) the nutrients available and circulating in our food is already enough should we use all of these nutrients in closed loops.  This also means that there may be little need of additional chemical fertilizers if these nutrients are returned to the soil which produced the food in the first place. 

At this juncture, it might be worthwhile to look at how the nutrients flow was in the preindustrial agriculture era and how that has changed as of today.  We will use these diagrams to explain the end impact of these flows as well.  The picture is put in only to ensure that we get a good collective look to understand the challenges we face in terms of organic waste for now and convert that understanding into possible solution pathways!

Fig. 1 Material Flows in pre-industrial agriculture

The simplified diagram clearly illustrates that in the absence of external chemical fertilizer input, all the excess biomass and food-refuse and waste is returned to the soil.  This means that the solution to the current problem can well be envisioned in this flow diagram. 

We can now look at the current flows of Nutrients in the era of rampant fertilizer use and explore ways to identify problems.

Fig 2: Nutrient flows in the industrial era – use of chemical fertilizers

We realize that in the modern world most of the nutrients supplied to our Modern Industrial Agriculture come through chemical fertilizers and very little through manure route.  We also realize that we are feeding excess fertilizer to our plants than what is necessary.  Having said that a good part of these nutrients is absorbed by the ‘additional’ produce – directly attributed to the additional input.  We realize that we now have our additional food, which has metabolized these nutrients (via the Chemical fertilizer route) and there is a great potential to continue and keep these external fertilizer inputs in the biological cycle.  This can only happen if we use the waste and food-refuse effectively. Return of this material to the producer can save the need for additional fertilizer input and still maintain sufficiently high yield.  Another observation is the linear nature of nutrient flows, leading to the seemingly unsurmountable problems of waste.  If we can indeed create the required circularity and precision in terms of nutrient flows, there is an opportunity to address multiple sticky problems in one go.

1. We ensure that ALL the nutrient flow is available for our agriculture and can indeed go back to the fields
2. We can substantially eliminate the need for additional nutrient stream – which is going into agricultural runoff and avoid the downstream pollution and health problems as well.  If some runoff is inevitable, we can capture the NPK nutrients and bring these back into the circular system by using hyper accumulator plant species.

Take a close look at Nutrient inflows and outflows in the city.  Some observations are as under:

Fig 3: The linear flow of nutrients today

Current method demonstrates that the nutrients flow into the environment outside of agriculture, where these create pollution in the form of land pollution, associated water pollution through the leachates (which enter the ground water near landfills) and pollute these water bodies. Such pollution leads to serious health problems for the village folk.  In fact, these pollution problems, again raises new questions and leads to pushing you into trying to find new downstream answers.  This model of waste management also requires substantial transportation, which is responsible for further local air pollution and global carbon pollution.  The landfills generate Methane in an anaerobic reaction, which is multiple times as potent a Green House Gas as CO2. 

In the ideal case the nutrients should go back to where they come from.  That is, these should go back to the producers in the villages, where the food is grown.  This will work only when we look at producing only as much as the village needs and all the output is recycled right in the farms.  However, in the modern world, where villages produce far more food to be sold and consumed by the city dwellers using chemical fertilizers as a nutrition boost.  These additional nutrition does not come back to the producers.  This cycle is broken and we land up with multiple problems as we see in the diagram depicting nutrient flows in the city centric consumption model.

If we must eliminate the challenges of pollution, we will need to look at the polluting elements and explore how the food waste & refuse can be converted to usable nutrients, which can go back into our food production cycle.  We can reduce the transportation necessary to the best possible extent by nurturing villages close to the cities to supply the city’s needs.  In near ideal scenario, cities should eat whatever is produced within the city and by the nearby villages based on their agroclimatic situation and the types of food, fruits, and vegetables they can ideally produce.  This could even be supplemented by forest foods if there are any forests nearby.  If otherwise, some restoration might be necessary. 

Another important aspect is to understand that all the food waste as it is called today is not waste but a source of nutrients for the producers.  In fact, any urban food production can be a good way to reduce transportation on both sides – food that comes into the city and waste that goes outside the city.  This way of handling the waste OR resource dilemma can solve multiple problems at the same time. 

1. Significant reduction is the scale of waste in the city.  Cities of course must manage waste to resource conversion and return such resource where it belongs – to the producers. Consider urban farming as an option wherever feasible.
2. No need for landfills – substantially eliminates the leaching and associated water pollution and ever-increasing need for land to be used as landfills.  This in turn will keep clean water sources available and can minimize the health issues connected with bad drinking water.
3. Reduce or eliminate black water – If Sewerage can also be converted to resource – much of the issues of water pollution will vanish.  Even while science has solved the problem and technology has the solution, such implementation is still looked at sceptically.  There may be a need of how society may look at at this ‘resource’ scientifically and positively.
4. Reduce transportation – On priority the manure output derived from Food refuse and sewerage should first be consumed in a cyclical fashion within urban agriculture initiatives.  This will further reduce transportation. 
5. Considering the pure material balance, if all the inorganic nutrients (NPK and other trace elements), which are part of the food we produce today, can go back as natural manure to the producers we will eliminate or significantly reduce the need for additional fresh chemical fertilizer.  This will also reduce the cost of inputs to agriculture and increase viability of agriculture.  Cost of agriculture is not so much because of the nature of business, but also because of lack of cyclicity in resource flows. This is a significant issue worldwide.

Here is how the desired flow of nutrients will look like in this new world of closed loop nutrient flows:

Fig. 4: The circular flow of nutrients – capturing all the nutrients out there

Considering, we make accumulation equal to Input– we would solve this problem of waste.  While true, it is impossible to accumulate material – whether food or discretionary goods, all the time.  Moreover, accumulating anything in large quantity or volume will call for space, which is not available in the city (or for that matter anywhere).  If this solution is ruled out, other solution could be to reduce the input to a level where there is very little waste.  This too seems impractical in the current economic paradigm and the scale of population we have reached, thanks to boost in productivity through fertilizer use and other advances in technology.

In the context of this imbroglio, there is a great opportunity to use the fundamental principle of material balance and law of conservation of mass to address part of the waste problem through circularity.

Note: The excess fertilizer eventually lands into our rivers and oceans causing serious nutrient ‘overload’.  Excess nutrients land up in rivers and cause algal bloom or excessive growth of water hyacinth or Pistoia like invasive vegetation and renders the water completely devoid of oxygen.  This phenomenon called eutrophication leads to substantial loss of aquatic biodiversity. The invasive species create new set of problems for the local governing bodies to deal with.   (There is also an opportunity to recoup this NPK using hyper accumulator plant species before such nutrient loaded water is released to the river, as also practice precision agriculture)

Using organic resource in a circular fashion could be a sustainable solution to addressing the problem of solid waste management – organic waste addressed in this blog – in cities.

Ajay Phatak is a Trustee and Faculty at the Ecological Society. He advices early-stage companies in the spaces of Healthcare, Environment on strategy and writes on subjects of energy, sustainability and circular economy.

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Entropy and your choice of energy: A distilled principle of choosing the type of energy for a given application

© Ajay Phatak, Think2Transform, Pune, India

Today’s society uses around 600,000 times the energy in absolute terms compared to late Palaeolithic foragers (IEA, 2019a).  At worst this number is alarming to the hilt and at best suggests that we must look at how we can choose the right form of energy for a given application to reduce the need for high density energy like fossil energy. 

We, as a society are almost addicted to convenience provided by technology driven by energy.  We are happy to use a clothes dryer run on electricity rather than using the sunlight and wind do their jobs for example.  We like to use cars for moving even a few 100 meters and the examples are plentiful.  These addictions have given rise to crisis in health by creating pandemics of obesity and so-called lifestyle diseases.  These very diseases then act as co-morbidities for the much-feared COVID-19 style pandemic diseases.

We might ask a question, what does energy use have to do with these pandemics and if so, what can we do something about this situation?

The principle goes as follows:

Based on fundamental laws of thermodynamics, additional reference to some work by Nicholas Georgescu Rogen and the way we use energy today, I have tried to distil a useful principle in term of how we should be using energy in our day to day lives.   We will need to know some fundamentals and need some knowledge about the basic laws, which I will try and provide as part of this article. 

For a given application and the given context, choose the energy at the highest level of entropy. 

My hypothesis is – it is quite possible that just using this principle all the time by all the population will help cut the use of energy by an order of magnitude.  Some changes in our temporal behaviour – or Notion of urgency and convenience with respect to time, will go a long way in energy reduction of this order. 

Let me now try to explain this principle.  But before I go ahead and explain this, we might need to understand a few concepts in thermodynamics, which I will try and explain with some simple examples. 

Even while entropy as a term in physics and thermodynamics can get quite complex, here are a couple of examples which will introduce you to this concept.

Let us first look at enthalpy or the total heat content.  Total heat content can be written in form a simple equation —  

Heat content = Cp x mass x temperature

(where Cp is the heat capacity or amount of heat a particular material can store in its unit mass)

Given this, we can have same amount of energy available in various forms.  An equivalent for Electricity is also available. 

As an example – the total energy content of 1KWh or 1 unit of electricity is same as 43Kg of water at 20 deg Celsius.  We can easily see that 1 Unit of electricity can do much more useful work such as run a 1.5 HP pump for 1 hour (as an example) than 43 Kg of water at 20 deg C, in spite of both cases carrying the same amount of total energy content.  In this example electricity is at a lower entropy level than the 43 Kg  water at 20 deg C and therefore can do more useful work.  Generally, sources of energy at lower levels of entropy can do more useful work owing to what availability of ‘FREE’ energy.

Consider an application where we need to maintain a temperature of a particular medicine (say) at around 20 deg C for say couple of hours, where outside temperature is day 18 deg C.  We have choice of both forms of energy – using Electricity of using this bank of water.   It is quite easy to see that choosing this bank of water, (I am using this example at a risk of over simplification) rather than using the electricity to achieve the same.  And if we do so, we will lose far less energy available to do useful work.  We can keep our 1 KWh of electricity in tact for doing more useful work and use the water bath at 20 deg C do our current work.  We have made a choice of high entropy energy in this case and ‘saved’ some energy, which could be used for application, which indeed needs that form of energy – for example running a computer for a duration time – for later. 

Let us quickly look at energy forms at higher and lower levels of entropy.  Here is a quick reference table in the order of decreasing entropy.  The last in the list can do most amount of direct useful work.

1. Sunlight / Solar insolation in as-is form
2. Wind in as-is form
3. Energy production by flora like biomass
4. Wood
5. Coal
6. Crude Oil
7. Electricity
8. (Information)

This means you should prefer 1 over 2 or 3 over 6 as a form of energy for a given application if it does satisfy our need – many times without compromising on the outcome. 

Let us take an example of heating the house.  If you live in a geography providing plenty of sunlight, your house should first use this sunlight / solar insolation directly to find a way to heat.  Also important of course is ensuring measures that allow retaining this heat once captured like excellent insulation. If we cannot use this measure, start exploring the option down this list and pick the one which can provide you best possible way to heat the house.   E.g. dry Biomass can be used to insulate your house to improve the efficiency of heating.  If you can use wood or coal without compromising on sustained availability of such a resource and negative impacts on human health due to pollution, those could be good options before we go further down the list.

Another example if moving short distances of say 1 km in a locality where ambient temperature is conducive to moving around.  Best option might be to walk (assuming you have those 20 min to go back and forth) and then could be to cycle if we are limited by time – rather than use a motorised vehicle of any kind. (by the time you pull the car out of your parking spot – you might reach the destination on a bicycle e.g.)   There are 2 aspects to consider here.  The energy that has gone into producing the vehicles (apportioned for this distance) and the energy that is used in the process of movement.  The added benefit of better health just due to such walking or cycling practices is not even considered here. 

Or take an example of heating water!  What can be better than keeping the water in a tank and let is heat by direct heat from the Sun.  If you need water around the clock, you may want to consider solar water heating system.  This of course has a downside of the panel manufacturing footprint!  However, it will always be better than using electricity from coal fired power plan to heat water.

Generally, if we accept sufficient elapsed time for an outcome (slower the process), we are more likely to accept the higher entropy energy source.  You have a few hours to heat the water, do not do anything but keep this water in the Sun.  Need hot water now, use the electric geyser – which uses a very low entropy electrical energy.

Another example, very easy to understand is drying clothes – give this a few hours on the clothesline and we would have dry clothes in a suitable climate.  If we want these same clothes dry now in a few minutes, we will have to go in for a low entropy energy option – like the electric dryer.

To elaborate the principle further: If you can identify applications which do not have stringent time constraint to get to the final result – like dry clothes – the source of energy can very well be high entropy – like the heat or light directly from the Sun.  Many things that we do daily, if planned well, can happen with a high entropy energy source, saving the precious fossil energy and also reducing the CO2 burden at the same time. 

As a next step in this process, we must plan to list all that we do during the day and put these in the buckets of urgent to those can be planned properly and are ok if these take more time.  Then we explore whether the urgent list can be further optimised to keep minimum number in.  Once done we start with available sources of energy and look at how various outcomes could be obtained with highest possible level of entropy.  To provide you a reference here is a list from highest to lowest levels of entropy once again.  We should go top down and choose the uppermost feasible form of energy. I have repeated the list for the sake of convenience below:

• Sunlight in as is form – directly from the Sun
• Wind in as is form
• Produce from plants (Biomethane, Vegetable oil, Bio diesel) – This option is typically useful on a smaller scale.
• Wood
• Coal
• Crude Oil
• Electricity

This strategy is a potent way to manage transition to sustainable use of energy.  This will help us to substantially reduce our need for high density energy, which will continue to remain a scarce resource, even when we consider derived low entropy energy from solar electricity. This (solar electricity) requires high density energy to make the panels to convert the high entropy solar radiation to low entropy electricity for our use.

Another highly desirable side effect of this energy use strategy is substantially reduced pollution.  Any low entropy energy use is cause of accelerated increase in waste heat and associated pollution.  To sum this up, immediate steps we can pragmatically take to plan how we make use of available energy in various forms to achieve our end objectives in available time.  This means the application of my distilled principle of how form energy should be selected for a desired application and outcome.

Stick the form of energy with highest possible entropy level for every possible opportunity.

Ajay Phatak is a Trustee and Faculty at the Ecological Society. He advices early stage companies in the spaces of Healthcare, Environment on strategy and writes on subjects of energy, sustainability and circular economy.

Growth, development and progress

Traditionally and even today in almost all economies – progress is measured in terms of GDP growth.  Interestingly, growth has been used as a synonym for development as well.  In effect we have collectively come to believe that growth is the only way to make progress.

Conventional economics still continues to play a pervasive role in defining policies for most nations.  Climate change as a serious threat to human life in coming decades is helping a bit in nations thinking about the environment at the least.  Even so, we still have not exited the paradigm of “free natural resources and eco services” and that human economy is bigger than nature’s economy.

GDP, interestingly is cumulative sum of investment and expenditure.

GDP = consumption + gross investment + government spending + (exports − imports), or,
GDP = C + I + G + (X − M) .

In no other economic measure one would find these two quantities added.  An example below amply illustrates what will mean GDP growth and whether that is what we should call progress:

1. Developed nations probably spend maximum amount of money on healthcare as a percentage of their GDP.  Increased healthcare expenditure means more consumption and production of medicines.  We add this happily in our gross domestic product.  If we just peep behind these numbers, we will be forced to ask a question  – is more people getting sick and needing medicines a measure of progress and development? What percentage of these medicines goes towards preventive medicine?
2. Interestingly more crime also adds to the GDP.  More crime means more “investment” in surveillance related technologies and equipment.  More “investment” in crime prevention machinery.  More expenditure on jails and jailers!   Is this a measure of progress?
3. Increased use of natural resources in any form which depletes natural capital, increases GDP.  In the long run (now in fact in a fairly short run!) we might land up exhausting the natural resources, even if we have achieved stable carbon emissions by then, we may not have any other resources (like water) to sustain.

Interestingly the 3 points combined together might well account for majority of GDP growth.

Very clearly the current almost unbreakable connection between GDP growth and Progress must be broken or else we can have tremendous growth for a short time culminating into a suicide!  We have to seriously start asking what the end objective of growth is.  Growth of growth sake seems to be a meaningless pursuit.  If we are working hard to grow for well being of all humans (hopefully we will move from this position to all life forms) – then we must question, whether we can really achieve that and equally important – sustain that?

As we recognize that we have a finite earth to live on and also sustain future generations, we have to move away from the paradigm of “free” natural capital.  When we realize that the Human economy must be a subset of nature’s economy and make this ingrained as our primary economic principle, we as intelligent beings will certainly be able to design our policies which can and will turn the focus on progress and development rather than myopic focus on growth.

Very clearly GDP growth is inherently linked to depleted natural resources.  As long as we are able to regenerate this depletion in some way (possibly human created natural capital) we should able to sustain humanity.  Unfortunately, much of what nature can regenerate on its own, if protected – we cannot regenerate by use of whatever means.  We must therefore understand what we can draw from the nature’s bank and what can we put back (may be by allowing nature to restore).  As long as we don’t draw more than what we can replenish every time, we should be OK.  If we start drawing more, which we have been doing since industrial revolution, we would be close to bankruptcy as far as nature’s bank balance is concerned.   We seem to be very close this potential disaster.

What could developing countries do in such scenario?  Does that mean that they cannot make progress?  Interestingly, thinking of nature and re-filling nature’s reserves will go a long way in making progress.  We cannot and must not believe that western model of consumption is the only way to make progress.

There are indeed various ways to address this aspect of progress.  We must therefore seriously consider “essential” Vs. Non-essential products.  If food from all sources is important and essential product, we must understand how we can produce the food we need in a sustainable manner.  This means that we must ensure that we are not increasing the yield in the short term at the expense of loosing soil fertility in the medium term.  We must be very careful of guarding the top soil as a treasure, which can help us grow our food on a sustainable basis.   As we make this our focus, we will see that we will have definitive impact on rapid poverty reduction.  Moving investment away from secondary goods will also mean that we will generate much less waste, which is also a significant down side of consumerist model of development.

If we design our policies keeping environment as an overarching super set of the human economy, we certainly have enough intelligence to design and implement the policies that would mean more equitable progress, progress that will also bring in peace and importantly will be sustainable.  As we identify the constraints imposed by natural resources and respect these limits, we would immediately place ourselves on the path of progress.

Copyright: Ajay Phatak, Sustainability proponent

Energy use and its economic and social impact

Energy is a very peculiar thing!  It has significant side effects on everything else on the natural resources front.  A few examples here will help understand this point of view.  Easy availability of electricity, leads to increased use of pumps (in the manufacturing of pumps one would need energy and materials – using more natural resources and energy) – leading to pulling out more and more water r from the ground (again wasting substantially more, than when one used a hand pump – say) – this leads to lowering of ground water levels, needing more energy to extract water and therefore more waste – apart from creating a water crisis!  This is what is called in technical jargon – a diverging loop – or a vicious circle.  Same is true with other aspects of “development” as it is defined today.  Easy availability of energy leads to more production, leading to “growth” leading to more need of energy and more natural resources.  We must start realizing that there are no natural resources to bank on for our infinite economic “progress” and the side effects of excessive energy use are leading us to bankruptcy on the natural capital front.  As soon as this realization sets in, there will be an urgent need of looking at ways to using “less” energy than more and still achieve well-being.

Energy use and its economic and social impact

We have been so used to using energy (especially in the cities) that we are not even in a position to understand what its proper use is and what is its wasteful use!  As energy started becoming easily available – specially after the discovery of coal and then other fossil fuels – as a society we started becoming less and less aware about what could be the impacts of more and more energy use on the environment and then economy and society.

Interestingly for all of last several decades and even today, we are always trying to forecast – how will we meet the increased energy requirement of the future, without bothering about what impact can present level of use, leave alone increased use, is already creating on the environment and therefore our own lives.  All “development” as we conceive today has been associated with increase in energy use, may that be for lighting, industry or transportation.  In fact such is a correlation with increased energy use per capita by various nations that it is looked upon almost as an index of development!  Interestingly, the end objective of energy use is often forgotten and very large part of energy is just wasted.

Peculiar nature of energy

Energy security cannot be looked at as an isolated problem to solve. Every instance of energy use creates substantial side effects apart from the well known CO2 emission and therefore potential cilemate change. Every instance of energy use – also uses material resources, which are scarce and getting further scarce, and it can also create waste which ecosystems cannot recycle. This means even assuming we indded solve the problem of energy availability, which itself is rather hard, unless we choose to get de-addicted from our comsumption behaviour, we will contunue to create material scarcity and create ample waste which cannot be recycled – as our ecosystems have aready hitting their limit. It is therefore important to look at our ecosystems health as a fundalmental requirement to any “progress” we make. As long as we are able to replenish the ever degrading natural capital, we will have a huge challenge at hand inspite of energy availability sooner than later.

Economics of Progress and peace

Economics of sustainability:
In this world of ever growing consumption, there is a strong need to look at economics from a sustainability perspective. Will the current economic model help you achieve the well being of everyone on the planet? Does our current economic model understand and appreciate the dependencies on nature? Does our economic model cater for the living world at large? Do we understand the importance of connectedness of all life forms? Would we be able to live if we destroy all the other life forms in the process of achieving the ever illusive human well being? Do we, the way we are consuming, have any likelihood of surviving at least a few generations more? These and many such questions lead us to start looking at possible new economic models which will look at the well being in integrated and holistic perspective.
Economics in a conventional sense has been a science of production, consumption and allocation. In the words of Paul Samuelson – a renowned economist – “If a Parrot knows two words – demand and supply, he may well be called an economist”. The demand side is the consumption aspect while supply is governed by production.
Economics, I argue is therefore a science of material and energy consumption and distribution! Money is only a vehicle that was introduced to make things simpler – that is in making it easier to transfer material and energy across people at large or producers and consumers to be more specific.
In the pre-industrial revolution era, availability of energy which could be conveniently used was limited, making it quite difficult for producers to create goods and services easily. With easy access to convenient forms of energy – typically fossil fuels, the equations changed substantially. There was no way to imagine then that we as human beings would expand our economic activities so much that it could impact even the availability of natural resources. The good old thought of economics – which is also taught even today in our school and college curricula – considers even now that Natural resources are “free” & ” infinite”. Moreover human economy must “exploit” these resources for the so called well being of the human race. It was indeed thought that this mechanism will help us reach that illusive well being with a hope that it would not disturb well being of the other natural world. The truth seems to be far from these assumptions. In fact it is quite clear that human activities led by this economic thought are taking us to a brink of a disaster.
So, what do we need to do – that we are so clear about the impact of this current economic thought. One of the most important assumptions the current economics makes – that of “infinite and free” natural resources – has been clearly invalidated. What we need to understand is the cycle of material and energy use. It is important to understand that all that we use as “raw material” in terms of material or energy – comes from nature. The services like clean air and clean water that we take for granted are nature’s services which could continue only if we do respect the store of natural resources and in fact help restore this to a level where the nature can indeed support provisioning of its services! We have come to a scale of consumption that is not sustainable by nature anymore. We must therefore imbibe the new economic thought (and this is not so new in reality) where we acknowledge very clearly that the human economy is and must remain a subset of nature’s economy. There are limitations to material and energy resources that we can access and use. There is a limitation to how much waste could the nature absorb and recycle. Once we imbibe this holistic economic thought we can certainly start thinking about how to manage – to live well – for ourselves and for our future generations, without excluding the other life forms on the planet.
It is quite evident that in the current economic system, the market economy – we see that the investment has gone where there is a return and not necessarily where there is a need! There have been occasions when need and returns indeed have matched up and we saw investment doing justice as well. There are however not too many places, where such investment has been kick started by a private industry. More often than not – this has happened through government taking a certain view. These are the cases where the economic action has been taken up keeping people (and other life forms) in the center rather than “the goods” at the center. E.g. design of cities keeping a car in mind will produce one with a large sprawl, where car becomes a need. However, if we look at designing this for the people and with people’s needs in mind, we will plan to minimize people movement and provide for secure mobility and access sans cars. The difference clearly is what you have in mind when designing a community. Traditionally, (if we decide to walk back before industrial revolution) towns have been designed keeping in mind services offered by nature and other human considerations of trade and business.
In post industrial revolution Europe, the investment has many times gone where public interest was involved. This was made primarily by newly rising class of Merchant interested in the business of export and import. This investment further stabilized and later accelerated factory system of production. This acceleration happened specially when large stocks for fossil fuel were explored and became available at very low prices. Extensive use of machinery enormously increased production and led to overproduction compared to demand and generated necessity to stimulate demand. Artificial stimulation of demand led to overproduction of goods which essentially were not necessities by any definition.
For production businesses to earn profits, inputs had to be priced as low as possible which led to impoverishment of labor and suppliers of natural resources. This also concentrated wealth in the hands of manufacturing community. This created a situation where purchasing power was concentrated in hands of few which created tremendous income inequality. The increased scale of production necessitated expansion of feeder services such as accounting, management and transportation. This gave rise to a new middle class as a provider of these feeder services. This class wielded more purchasing power and participated in consumption of intermediate goods. This phenomenon further increased the pressure on natural resources and created huge waste.
This focus on producing intermediate goods has led to denying the remaining part of humanity their daily necessities – and accentuating inequality. We have seen this phenomenon time and again. So called industrial progress is mainly based on enormously undervaluing the inputs in terms of natural resources and nature’s services.
Low prices of food grains and other food items have further led to directing investment into cash crops – which are inputs to industry. Investment is clearly moving away from the daily dose of food we eat.
In countries like India, if the farmer stops producing the food we eat, just because it is no more ‘economical’ – resulting in increasing the prices beyond the means of many in cities, we could easily see a food crisis. In fact the food price rise witnessed by India in the recent months is a testimony to the theory. If enough investment was driven in sustainable farming and reducing the uncertainty of livelihood, if investment went into regeneration of natural resources, one could in fact see alternative livelihoods emerge.
In the times when “climate change” is a center stage issue, one must look at what went wrong and how do we design policies to shift towards this much needed correction. Let us assume for the time being that the problem of energy is solved and we will have as much energy as we need forever without any GHG emissions – we still have to live within the material limits of the planet, we cannot for example assume that say “aluminum” is available indefinitely, or any such “raw material” to be available all the time in coming future. It is very clear to see that excessive focus on production makes us drive excessive consumption and not really the other way round. This excessive consumption, by 5% of humanity creates enormous waste – solid, toxic or CO2 – which the planet is unable to digest and we are seeing challenges that are becoming insurmountable.
Today we promote how a car adds to your social status, we promote how living in large houses adds to the status, we also want to spur “consumption” and celebrate consumerism! We should in fact promote – how living in villages and regenerating nature, while producing necessary food is “the” lifestyle – which provides happiness, health and with media talking about this – even status. Policy makers and media together can play a significant role in seeing this shift happen and that too very quickly.
Adopting these elements of thoughts must become a driver for a much needed change in economic policy. This will then be the real economic reform which will lead us to sustainable future.

Copyright: Ajay Phatak, Sustainability proponent