Read an Excerpt
The Restoration Economy
The Greatest New Growth Frontier
By STORM CUNNINGHAM
Berrett-Koehler Publishers, Inc.
Copyright © 2002 G. Storm Cunningham
All right reserved.
ISBN: 978-1-60509-649-0
Chapter One
The Three Foundations of the Restoration Economy
To restore is to make something well again. It is mending the world. People have to believe there will be a future in order to look forward. To live in that future, we need a design. To pay the bills from the past, we need a means.... For those who say that times are tough, that we can ill afford sweeping changes because the existing system is already broke or hobbled, consider that the U.S. and the former U.S.S.R. spent over $10 trillion on the Cold War, enough money to replace the entire infrastructure of the world, every school, every hospital, every roadway, building and farm. In other words, we bought and sold the world in order to defeat a political movement. To now assert that we don't have the resources to build a restorative economy is ironic, since the threats we face today are actually happening, whereas the threats of the postwar nuclear stand-off were about the possibility of destruction. —Paul Hawken, The Ecology of Commerce, 1992
The sudden growth of restorative development is rooted in three crises. These crises emerge whenever an economy—global or local—remains dependent on new development for too long.
The Twenty-First Century's Three Global Crises
1. The Constraint Crisis We're out of "painless" expansion room: every time we put property to a new use, we lose some other vital service it was providing. Wars and legal conflicts over territory and related natural resources are epidemic.
2. The Corrosion Crisis Most of our built environment is aged and decrepit; is wearing out faster than expected; or is based on old, wasteful, dysfunctional designs.
3. The Contamination Crisis The ecosystems that produce our air, soil, food, and water—and fueled our centuries of unbridled new development—are under great stress, as are the immune systems of both human beings and wildlife. Industrial, agricultural, and military contamination is largely to blame, and its damage is compounded, in a vicious cycle, by the reduced capacity of our damaged and destroyed ecosystems to cleanse the environment.
This chapter is an overview—not a thorough accounting—of these crises. Parts Two and Three, where we look at the restorative industries that are addressing these crises, contain a more detailed examination of these crises, and our restorative responses to them. This chapter scans the Three Crises from three perspectives: the U.S. economy, non-U.S. economies, and the global natural environment. The crises won't be segregated from each other: they are inextricably intertwined. Nor will we always label them or point them out, as each is easily recognizable.
The Three Crises at Work in the United States
Almost all of our sewer and wastewater projects are rehabilitation these days. Even with urban sprawl, construction of new systems is a rarity. It's true nationwide, but especially so here in the Northeast, where everything is so old. —Howard B. LaFever, P.E., DEE, Executive Vice President, Stearns & Wheler Co., a 250-person engineering firm (conversation with author)
In 1998, the American Society of Civil Engineers (ASCE) issued a "Report Card on America's Infrastructure." It revealed, for the first time, the extent of one aspect of our built environment's deterioration: a $1.3 trillion backlog of desperately needed work on our public infrastructure. Our bridges, roads, sewage plants, solid/hazardous waste handling facilities, and educational institutions are crumbling before our eyes.
Although some of this $1.3 trillion is for maintenance, by far the majority of funding is needed for renovation and replacement. Even more importantly, while $1.3 trillion is a gargantuan number, it represents only public infrastructure—just one of eight major industries of restoration—and it's only the U.S. portion.
But this book isn't about bad news. Quite the opposite: Restorative development now accounts for hundreds of billions of dollars in the United States alone, maybe a trillion, depending on how one defines it. Just two years after the first ASCE Report Card, a small but significant portion of the transportation renovation challenge had been funded. The June 1998 Transportation Equity Act (TEA-21), along with the TEA-21 Restoration Act of July 1998, addressed a significant chunk of the U.S. Corrosion Crisis. It increased spending over a six-year period by 70 percent, allocating over $200 billion in federal funds to U.S. transportation infrastructure. States will add significantly to this amount.
Only 20 percent of these funds is for "new starts," while about 25 percent is officially designated for restorative projects. But, almost the entire remaining 55 percent is allowed to be spent on restoration (as opposed to maintenance, like patching potholes), and most of it will be, according to conversations with several state Department of Transportation (DOT) officials.
There's good news for the Contamination Crisis, too. Restoration is being funded by reallocating the budgets of some of the most harmful, out-of-control agencies of new development. The U.S. Army Corps of Engineers' budget is being reallocated from new development to ecological, infrastructure, and watershed restoration, and the Corps is far from alone. The Department of Energy now spends billions cleaning up the petrochemical and radioactive mess it left all around the United States during the last half of the twentieth century.
The United States will account for more than its fair share of space throughout this book, so we won't focus more on it here. Suffice it to say that one would be hard put to stand on any piece of American soil without seeing (or detecting with instruments) at least one significant impact of the Constraint, Corrosion, and/or Contamination Crisis.
The Three Crises at Work Around the World
Restoration ecology plays an important role in nature conservation policy in Europe today. —Jorg Pfadenhauer, Restoration Ecology, June 2001
The trillion dollar-plus annual bill for restorative development is no surprise when we consider the Three Crises globally, especially when we factor in the crushing needs of former communist bloc countries. Many of them are economic and environmental basket cases (the two usually go hand in hand), and their problems are affecting us "First Worlders" more than we like to think, in terms of our health and our wealth.
The United States leads the world in many categories of restoration, but all other industrially developed countries are now moving along the restoration track at a similar pace. As a result, most U.S. and European firms that continue to concentrate on new development are being forced to shift their focus to Latin America, Asia, and Africa. Even in regions where new development is still strong, such firms will be missing many, often better, opportunities if they ignore the developing world's fast-growing restoration markets.
Three recent announcements, one for each of the Three Crises, illustrate the magnitude of non-U.S. restoration.
1. Constraint (and Contamination) Crisis At the Brownfields 2000 conference in Atlantic City, New Jersey, Detlef Grimski, a project officer with Germany's Federal Environmental Agency, revealed 304,000 (official) contaminated sites in Germany. The agency's studies show that restoring just 320,000 acres of these "brownfields" could provide 28 percent of Germany's housing construction needs, and 125 percent of its industrial construction needs.
However, both Germany's construction industry and its government are stuck in new-development mode, destroying some 300 acres of rare, precious greenfields daily, while ignoring the wealth of brownfields. ("Wealth of brownfields," a phrase I've heard at several conferences, is the sort of perverse language that's endemic in the dying days of a new development-based economy.)
2. Corrosion (and Constraint) Crisis Developer Minoru Mori, President/CEO of Mori Building Co., Ltd., and a member of Japan's Economic Strategy Council, has proposed a trillion-dollar restorative development plan for Tokyo, one of the world's oldest and most crowded cities. "Revitalizing Tokyo and other major cities is the best way to revitalize the Japanese economy," he claims. It is part of an "Urban New Deal" policy he has presented to the Japanese government. It is strongly focused on cultural renewal, calling for a "true urban renaissance."
3. Contamination Crisis On June 5, 2000, Romania, Bulgaria, Moldova, and Ukraine signed the "Green Corridor" agreement for the Danube River, which has more riparians (countries that border it) than any river in the world. It is Europe's largest environmental restoration initiative ever, encompassing over 1.5 million acres of wetlands and riparian habitat. That's just a beginning: "It is our vision that other countries along the Danube will join this initiative for a full-length green corridor, connecting Danube countries from the Black Sea to the Alps, including many EU accession countries," stated Romica Tomescu, Romania's Minister of Waters, Forests and Environmental Protection.
Worldwide disaster recovery—both war and natural—is a category of restoration that accounts for over a hundred billion dollars annually. And then there are non-war, non-natural, human-caused disasters: literally hundreds of significant oil spills, industrial explosions, chemical spills, toxic fires, and radiation leaks occur daily, worldwide. Someone once said that CNN could devote a channel solely to natural and human-made disasters—giving each item 10 seconds and never repeating a story—to fill each day's programming.
Being more "real estate challenged" (Constraint Crisis) than the United States also puts Europe ahead on the new development vs. maintenance curve. Tim Broyd, Research and Innovation Director at the WS Atkins company in the United Kingdom, told me that his company had, ten years ago, about 2,200 employees and virtually all its business was in the design of new construction. Today, the company has about 7,500 employees, but 60 percent of its business is related to managing existing facilities, and much of what it counts as "new" construction is actually restorative work (or "refurbishment," as the Brits tend to call it). Broyd says that such growth and profitability paths—switching from new development to maintenance and restoration—are now the industry norm.
The 1998 Yangtze River floods, which were largely caused by the clear-cutting of surrounding forests, killed thousands, obliterated entire communities, and caused massive migration and waterborne sickness. To address the resulting Constraint and Contamination Crises, the Chinese government launched an emergency $12 billion reforestation program. That $12 billion figure exceeds the Gross Domestic Product of Panama, and that of Costa Rica. In fact, it's larger than the GDP of 113 of the 189 countries existing in 1999, and that sum represents only one of China's many deforested watersheds. Unlike conservation efforts, where million-dollar projects make headlines, the word "billion" is quite common in restoration circles, at least at the national level.
The similarly huge reforestation projects that are needed worldwide would take pages to list. In early 2000, when deforestation-related floods devastated Mozambique, Zambia, and Madagascar, Mozambique asked world donors for $450 million to rebuild its nation. Millions are still suffering the effects of the floods—again greatly amplified by deforestation— caused by Hurricane Mitch in Honduras, El Salvador, and Guatemala, in October 1998. The more reforestation takes place, the fewer such devastating disasters. Reforestation fulfills many agendas beyond mere flood prevention: producing drinking and irrigation water, carbon sequestration, firewood-lumber-pulp supply, and recreational industries are just a few of the added benefits of reforestation. As the advantages of reforestation become better recognized, the funding for watershed restoration continues to increase.
Saying Goodbye to (Some of) New Development's Ethical Problems
As has been extensively documented in recent years—even by the bank itself—the World Bank's colossal dam, highway, and fossil fuel power projects almost unfailingly displace poor farmers. They also disrupt healthy portions of socioeconomic systems, and kill or degrade vital ecosystems, all while (usually) failing to provide the promised counterbalancing, short- or long-term benefits.
Further, the World Bank does not attempt meaningful remedies for people it has displaced, as many have noted. For example, Lori Pottinger of the International Rivers Network said in a Wall Street Journal article, "We've never had confidence in the World Bank's ability to restore these people's lives." MIT professor of Law and Development Balakrishnan Rajagopal refers to the "violence of development." He coined the term "development cleansing" to describe the way new development, such as dam building, usually takes place on the lands of poor and/or indigenous peoples, displacing them by the hundreds of thousands, in a process similar to ethnic cleansing, only with bulldozers instead of guns.
Trying to find ways to improve and revive the waning paradigm called new development is a recipe for frustration. The Constraint and Contamination Crises will provide development banks with many decades, even centuries, of work if they switch from new development to redevelopment. As we'll see in Chapter 14, that's exactly where the World Bank's future may lie: restorative development.
On a cynical note, we could say that efforts in the first seven restorative industries—ecosystems, watersheds, fisheries, farms, brownfields, infrastructure, and heritage—decrease business in the eighth: disaster restoration. No worries, though: swelling (largely coastal) populations, combined with global climate change, should ensure a burgeoning supply of lucrative disasters for the world's restorative A/E/C (architectural, engineering, contracting) firms. The fact that politically powerful lumber companies still get away with clear-cutting ensures that many fortunes will continue to flow from flood-related restoration for decades to come.
The Three Crises Have Been Masked by Three Myths
Men and nations do behave wisely, once all other alternatives have been exhausted. —Abba Eban, Vogue, August 1, 1967
The environmental problems of new development derive from all three of the Three Crises. The Corrosion Crisis contributes to environmental problems in the form of outdated, toxic industrial facilities, obsolete sewage treatment facilities, antique fossil fueled power plants, etc. The Contamination Crisis's effects in this context are obvious.
But it's the Constraint Crisis that's most tightly linked to our ecological decline. If we keep expanding our population on a planet of finite size, simple logic plots a clear path to Armageddon. Restorative development can greatly delay the collapse and can even increase quality of life along the way, but there's no escaping the laws of physics. The universe might be expanding, but this planet isn't.
It took us only twelve years to go from five billion to six billion people. Several indicators show the rate of population growth decreasing, "thanks" in part to increased death rates due to starvation, dehydration, waterborne diseases, malaria, AIDS, cancers, and other health concerns, most of which are directly or indirectly related to the Three Global Crises. The average life expectancy in many African countries has plummeted in the past decade, dropping from 62 to 40 years in Botswana, and from 61 to 39 in Zimbabwe.
(Continues...)
Excerpted from The Restoration Economy by STORM CUNNINGHAM Copyright © 2002 by G. Storm Cunningham. Excerpted by permission of Berrett-Koehler Publishers, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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