Monday, June 12, 2006

Introduction to Technosphere


Economic growth is widely accepted as the best way to create an acceptable living standard. The World is seeing economic growth and living standards. Average world economic growth is happening at a rate of about 4% per year, in some places like China growth is exceeding 9%. Creating this growth requires an increasing spiral of extraction and commerce in the form of production of products and services and their sales, distribution and end of life handling.

This technological, commercial and economic activity uses a lot of energy and natural resources as well as vast inputs of human activity. For example, the average American uses 600 litres of water a day, the equivalent of 25 barrels of oil a year, produces many kilograms of garbage. Metals and other elements essential for this system are brought in and out of the country by the shipload.

The end of life of each cycle of activity outputs substances categorized as garbage, waste, emissions and refuse. This categorisation denotes they are no longer deemed useful for the technological activities and are deposited, burnt or otherwise disposed of. Although some recycling occurs, where the substances are reclassed as useful resources, a lot end up back in the Earths crust in landfills, or are released into our water or air systems.

One reason these resources are waste is that they are combined with other substances and so difficult to separate they cannot usefully be put back into the technical and commercial system.

Loss of valuable materials means reduced capital for coming generations
These resources include metals, trace elements, elements of organic systems like nitrogen and phosphor, fossil energy. Whilst all were once seen as a resource, at the end of life of a product or service end up as waste, and are treated in such a way as to be virtually unrecoverable for re-use.

Apart from this. these substances can cause problems as they journey through the biological system. In some cases substances enter the biosphere and cause problems with the workings of the climate systems (greenhouse gasses) and eco systems (persistent herbicides). In some cases, these substances act as an extra inflow of nutrients to cause imbalance in population growth, for example algal blooming.

This linear flow of material from mine to waste disposal presents several challenges;
The first is destruction of natural capital. You could say a nation is endowed with resources like metals, fuels, organic resources and these are used once, never to be available again to future generations. For example, babies being born in Kuwait and other Arab states are being born into a country whose oil supplies are on the decline, by 8% a year.

This is in a situation where the population is growing. In real terms, there are less recoverable natural resources per capita now than there were say 30 years ago.

This could maybe be justified if these resources had been used for the benefit of these coming generations to invest in renewable energy generation, education, large scale projects which will last generations. But they have not. For the coming generations, creating a standard of living will be harder.

The second area of challenge is the work needed to keep the linear flows running. This work is the input of working hours and energy. This work input itself depletes natural resources, especially fossil fuel.
The third challenge lies in the effect of all this activity on the surroundings. Mining, manufacturing and commercial activity all burden the environment and impact health, agricultural land and thereby the capacity of the area to carry future generations.

Finally, setting up the linear systems and infrastructure is an investment which creates a dependence on its contnued use.

Finding ways to redress the imbalance
Let us leave the discussion of ”how did we get here?” fcr another time. We need to be looking at how to change the way we run our societies to reverse this sorry trend. The linear way of thinking is so ingrained in the way we do things that it controls our actions and decisions almost invisibly. A conscious effort to rethink is required.

Which is why we should talk Technosphere. Technosphere modelling shows how living arrangements could be set up to satisfy needs of current generations and actually improve living standard opportunities for coming generations. Technosphere thinking can help redress imbalances in today’s systems.

Principles of technosphere
Technosphere approach sees a combination of technical systems existing within the biosphere. The biosphere is the natural layer above the underlying rocks that accomodates all living organisms and includes the hydrosphere and atmosphere. Materials of non biosphere origin (i.e. originating from the geosphere.) entering the system are idcntlified as technical nutrients.

The end of the service production cycle technical nutrients retun to the start of another cycle, in the one just left or a new one. Although the Technosphere exists within the bio and geosphere, they are in principle separate. This means there is no or at least restricted exchange of nutrient between the two systems. Where they do meet, special conditions apply.

Characteristics of the Technosphere approach include:
  • Technical nutrients: Anything coming out of the Earth’s crust is seen as a technical nutrient. This means it should go into the society’s technical systems and be recycled indefinately.
  • Separation of spheres: The biosphere should be kept away from the Technosphere, and visa versa. For example, fossil fuel has no place in the air or water. And water and microorganisms have no place in fossil fuel. However, the Technosphere can augment the ecological systems they interface with, by providing for example biological nutrients to improve agriculture or improve raw water for drinking water production.
  • Design for recycling. All components of the Technosphere are designed to function within the systems of the sphere through manufacture, assembly, use, repair and reuse and recycling. The components are re-introduced after end of life into new components.
  • Design for enrichment: Components and systems are designed to improve the resources in the Technosphere. For example, we could imagine a vehicle that captured nitrogen from the air and released it as fertilizer.
  • System interfaces. Where the biosphere meets Technosphere the exchange of nutrients is carefully controlled to ensure that
  • No technical nutrients enter the biosphere to upset ecological systems or to deplete the resource pool
  • No biosphere components enter the Technosphere to upset the workings of the systems.
  • Clarity of purpose. The purpose of the Technosphere is to provide a standard of living for the inhabitants in the area the technical systems operate. This is important as crating a Technosphere system merely to make money so someone can buy Technosphere services makes little sense. Apart from this Technosphere does not specify how monetary systems would work. Possibly the creation of an econosphere model would illuminate a distribution of bio/techno system services.
Coming soon: how to describe a setion of the technosphere, with examples. watch this space!

Thursday, June 01, 2006

Sustainable investing - Units of trust - Session 2

PREAMBLE .
The background to these sessions is my interest in investing in sustainability. In earlier sessions I visited one place that has been successful using a system called Unit Trusts. These can be placed in organizations providing for a standard of living in a sustainable way.
Please read session one before proceeding if you have not yet read it. Click on the link in the title above or here.

By sustainable investment, I mean putting money into activities and organizations that create and operate infrastructure that produces living standard. After construction they should require very little input of fossil fuel.

Last time, I met the system and the scheme in an introduction exhibition stand and acquainted myself with the trust organization and the organizations it supported.

Questions raised from that include:
How is an organization that has something to offer supported by the Unit trust scheme?

THE QUEST: To revisit the place to find out more about how an organization with a sustainable concept can be supported by the fund.

TAPESCRIPT: On a bench in the departure lounge, I watch people dropping into the stand. A young man in a grey suit comes out and offers to tell me more.
I accept and follow him out of the waiting area up an escalator to their offices in a skyscraper similar to the LETS building in an earlier stream.

The lift takes us to the fourth floor.
He shows me into a rather ornate wood paneled conference room,
He offers me a mineral water.

I explain I have an organisation that fits their profile but I need the finance, could he tell me what the trust provides?

One main activity is the yearly marketing system, where they go out and raise money by selling units. This increases the total number of units. Directly after this activity they have a higher proportion of unplaced units.

Unplaced units create a demand for sustainable products and services. Every unit that is purchased removes demand from counter sustainable operations and
switches to sustainable investment.

The unit trust organizes these exhibitions and different kinds of activities which participating organizations get the right to use . That is, they can attend as exhibitors.

Interested organizations can sign up on the trust's website.
Some rules:
You must be a registered company or cooperative.
Energy intensive organisations are not allowed.

He also explains you must make your own profile of what you are offering.
I see graphs with investment, maintenance costs etc. and professionally written descriptive texts.

So how do I learn all that?

“Maybe I should get your help.
” I ask
“Once you have placed with us. you can go on courses,“ he replies.
I feel anxious about understanding the point system too, which does not seem accessible.
“It is part of the course.“ he reassures me,

How can you start up with the same number of units you end up with? It is as if the money is used and not used. Or are there systems with points. 10,000 points or 1000 points?

(I feel agitated trying to get everything at the same time)
I calm down and ask;“Perhaps you could explain to me the benefits of joining the trust scheme.“
His reply contains two unarguable essentials.
1) Capital
2) Customers

The scheme plugs entrepreneurs into the system and it only requires one unit to get going.

Furthermore, if it does not work out I can move the unit over to the sustainable development section.

I remark.: “It seems like a good idea. I get my marketing done, get my customers and get my capital.“

“Exactly! You have to provide the activities and set the infrastructure and organization up. Along these lines.“

I just commit to a unit and at any time I can take it back.
About the prices of units; Nominal value is 10,000 Swedish crowns.

This can go up and down. depending on the economic climate in general.
But that is not to do with what you get from you investment. Everything is relative to units and points. Even if the value of units go down, they still generate the same services. This is essentially how the scheme decouples production of living standard from economic climate.
If you buy a house and house prices go up then you can get more for your house. then you have made money. If you sell your unit placed in housing when prices have fallen then you will get less for it. But through the rise and fall of the economy you get the same housing service.

“So how do you work the unit price out?”
“We make an aggregate that follows the consumer price index “

The cost of units goes up and down with the economy.*
“Can I buy more units? “ I ask.

More units give more exposure in more local areas.

One unit is enough to get a small organisation started.

I wonder: “Can a company earn points?“

“Yes if it does activities that earn points with other companies in the scheme. Otherwise they can’t.“

“It seems organizations can take this at different speeds. Once I have placed a unit with the trust I can go on courses and be developing for ever, can’t I?”

“That’s true.” Some things take time. Some things go fast. Business plans and stuff are required, you need to describe what you will do in terms of what your organization is going to give unit holders. Then you get a team of people who will help you create a sustainable business plan.

My question then is - what’s the best way to start so I can use the Trust's services most effectively.
He explains. If you just got an idea, then you need to describe it in terms of contribution to sustainable development and use the same description methods they use. This is so people can understand what it is they are going to invest in.

He senses I am very wary of this sort of thing. I explain I lost some money in investments before.

He says I can let it take its own time, in small steps. He points out that 10,000 is a small investment risk.

I ask if I can get stuck in the scheme and then can’t get out of it.

“You already are.“ he says. You are always in a scheme. You need to choose which one. “We are giving you a chance to choose.“

I agree.

.I sigh “I need to do all that work – not so appealing.“
“Look. It’s fun once you get into it.“

I sort of feel uncomfortable and ask for the next step.

He suggests I attend an exhibition of the point system and go through the materials explaining how it all works.

Saturday, May 27, 2006

Invention from the future - investing in sustainabilty

PREAMBLE:
In this imagestream I wish to address the dichotomy between industrial thinking and sustainable thinking. Many have been brought up in the industrialized world and find it hard to imagine alternatives. And yet alternatives are needed; industrialization cannot go on forever. In industrialized thinking you are a worker, you own a house maybe, shares or funds. You are a citizen and can vote. To maintain your lifestyle you have to consume.


If someone wanted to use their money to invest in an organization or opportunity that would give them a sustainable return on investment what would be available to them?


I imagine this particular investment would be in real assets, generate energy, housing and food or transport in a sustainable way. Possibly, their value increases over time compared to fossil fuel powered alternatives or your investment would give a dividend in the form of these services.


Anyway, investing in these organizations, instruments would give you food, housing or transport (energy) as well as an asset that increased in value over time.


After investigating possibilities through imagestreaming I would like to make a proposal to several organizations about cooperation with AVBP to create eco-units.


THE QUEST is to visit a place where these kinds of opportunities, instruments and schemes are used successfully to offer individuals, though individual investment, the opportunity to sustainably generate their living standards and constitute an investment for their kids and the future. These investments themselves have monetary value that should increase over time.


TAPESCRIPT I am in the arrival hall, looking for a lift. I’m attracted to a dark red exhibition stand. An exhibition booth. A sign over the entrance says, “Investing in the Future”.


I go in, a man is standing at a table, he hands me a brochure.


“Are you interested in investing in the future?” he asks.
“I certainly am,” I say. He chuckles a bit, which makes me feel uneasy.


The brochure contains pictures of wind power, waterpower etc. He invites me to proceed further into the stand. A few people are milling around with drinks and snacks. Screens are showing pictures of sustainable ventures.


I get a cheese on a stick to nibble and a glass of non-alcoholic cider.
It’s all very informal - it seems the idea is to entice passers-by into the stand.
Investment in the future – a DVD playing talks about oil, its depletion and the effects on everyone’s economy, about population pressure on the planet etc.


… However, there IS a way using renewable solutions, but we must construct them now while there is still time, for your children’s sake. Before it is too late
…We already have this place going and more examples. You are being invited to join, if you like.


I feel a sense of mistrust …maybe it’s too good to be true ….or the way the guy laughed. An oxymoron to invest in the future isn’t it – what about now?


Still, it seems to be well grounded. A paper talks about number of working hours, your work, how you use your time, what you can get from this use of time, with many tables and graphs. In fact, it looks rather like an investment brief.


I browse though it, looking at graphs of future price of oil contra renewables. (I know from experience that trying to read documents in an image stream is rather difficult so I concentrate on the pictures) Another shows the number of hours you have to work to get your daily bread and the role oil plays in that. The higher oil prices rise, the less you can buy with your hour. And then it asks you what sort of life you want, and looks at the available choices.


I suppose this is a chance to browse the material and look at the videos showing places already functioning along these lines.


You can just simply sign up. I look at a paper, which says you can buy a unit or a number of units. The accompanying application form asks for your name, address and other details, and your signed request to purchase. That is all you need to get in the system.


I wonder what I would do with my unit when I have purchased it. Someone takes me aside to explain.


“What will I get for my money?” I ask.

“You become a unit holder, sir. The stands in the next part of the exhibition explain what unit holders get back from their investment.”


This stand extends into a larger, white exhibition space behind the red one. I take the investment brief and the form and move on. Each exhibitor has a table and exhibition space behind them, arranged around the outside and in the centre of the area.


People are milling around handing out brochures for various things.


At the first table someone is planning an eco unit. Depending on the number of units you have invested you can do different things in the eco unit. (Editor’s note see link to explain what an eco-unit is – an ecological village self sufficient in food and energy.) You buy a unit for a certain amount of money. From there on there is no counting in money. You can always compare to monetary value, though. In this case, to put myself in the queue to live on an eco-unit I have to have a certain number of units saved.


This queue is not yet full, they are building a total of 80 houses. One of these trust units would give me a certain number of points which I could redeem for a share in their excess food produce for example. However, it is not enough to have purchased a trust unit. I must have it placed with this organization.


Depending on how many units I place, I get points back which I can redeem against holiday, produce and a way in to buy and own a house on the eco-unit. I could also save points to contribute towards retiring to an eco-unit.


The next one is a sailing boat, a big beautiful boat. To join the scheme you place one unit with this organization. Its main purpose is to carry freight sustainably. This scheme is already going- The boat is long, wind powered, and if you invest in it you can join the crew. You can have a holiday on her or help out for good, physical, fun, If you crew you get points. These can be redeemed for produce from other organizations. A video is showing the boat … come on board… it’s beautiful … wonderful investment … just have a holiday … travel …crew .. we all need boats.


Continuing though the exhibition I am drawn to a table behind me about growing food.
A person on the stand explains the scheme provides a system for growing vegetables close to your home. Place in this scheme and you get a whole kit of pots and stuff.


If you invest in this scheme you get utilitas – that is to say you do not own the equipment but you get the right to use it. (I have difficulty snapping up the phrase is it utitas or ulitas?) If you invest in the organization you get the opportunity to enjoy some of the capital.


Over the other side of the hall, a wind farm catches my attention. You place your unit in the wind farm and get the right to have a wind turbine. You do not own the turbine but you have a right to use it.


I am picking up a principle here that seems to apply throughout the examples I have seen so far– one of not actually owning anything but having a right to use things.


In this case with the wind turbines, I will earn points by putting energy back to the grid. They install the machine in your house, on your property. The energy goes back to the grid for points.


The system is simple: a wind turbine and solar panels on your roof produce electricity. The electricity you do not use feeds into the grid to earn you points.


I start to grasp the significance of the whole unit trust set-up. One unit costs about 10,000 SEK (say 900 Euros). That is quite a bit of money, but many pay that for a TV so it is affordable. It is not as if you pay once and the money is gone. This is a very secure way of investing. Because if you remove your unit from the organization then they remove the things from your house, but you can still place the unit elsewhere.


That brings me to muse about the food bit, how home growing works. I notice a stand presenting “Local Food Schemes” and walk over to it.


The stand looks like a market stall and demonstrates how the points system works across local organizations. If you invest in a Local Food Scheme, as a grower, you can sell your produce for points in the market. If a Local Food Scheme is effective and produces a lot of food, many points will accumulate. These can be swapped with the Local Housing Scheme. I start to see that although the Unit Trust organization is national, it is the local network of organizations that must “join up the dots”.


A Local Housing Scheme (LHS) can buy an apartment block, and instead of paying rent you redeem points. The reason for this is, in the future you may not have the money to pay rent or energy bills.


Or if you all own flats in an apartment block you can place units in the LHS and they will help to convert the block to low energy and take over everyday running, maintenance and upgrades.


Some advisors are walking around, I ask one:


“So can I check I have this right? I buy units, and then I have to choose where I place them. Placing my units gives me back sustainable goods and services.”


“That is correct,” she replies.


“But I never ever loose my unit. I can take it out and put it in another one?”


She smiles: ¨Where you place units depends on your state of life. You can buy units with points or use the points for consumption.”


I ask about tax but she thinks I should come back another time for that one.


She adds: “It is the unit trust (as she calls it), this organization, that puts on these events.”


“So you market yourselves this way in these exhibitions?”


She explains that they put on these exhibitions and market via traditional channels. They talk to existing organizations, cooperatives or companies and explain the benefits to them of joining. They these organisations join the scheme by purchasing units in the unit trust.


I ask for an idea of how my organization would go about joining.


She explains: “You get a number of points related to the number of people who want to invest in you. The unit trust does not invest in your company. Your organization gets a chance to meet a number of investors via us. You invest in us, and keep your unit placed with us. Our role then is one of matchmaker.”


She explains that organizations come away from an exhibition with a local contact person, address to the website, and already an idea of how to place their unit.


I thank her and leave


Review
Things that surprised me

• The simplicity of structure of the funds

• That you can invest once use forever. It’s such a secure thing to do with your money. But can it last forever? Turbines break down, pots break, boats sink…

• The need for marketing – to have a good story to tell individuals about how peak oil will affect them and what they can do about it.


Things I could use immediately

• Marketing – the argument for sustainable investing is rather clear and compelling.

• DVD films and brochures could work well.

• Important that working examples really exist.



Things to verify

UTILITAS There must be a concept of Utilitas somewhere. It sounds like Latin. Maybe something to do with law.

UNIT TRUST I have heard this before, sounds like something like a British building society.


Sidebands

The “story” – how to explain the investment potential of renewables. The points counting I suspect I have a kind of economics going on here, but based on what people need rather than money or other units. Thins that might make up the system include number of hours in a year as working hours, food requirements, shelter and security.


Further questions

• How invest once use forever works – is it really possible?
• How an organization can use the unit placements
• Taxation
• Legal structure
• Relationship to legal tender – if I want to sell units
• Understanding the arguments deeper – for example number of hours worked to be able to purchase living accommodation
• Point counting administration

Research

Utilitas.
From Wikipeadia: In economics, utility is a measure of the happiness or satisfaction gained consuming goods and services.

util (plural utils)
1. (economics) a hypothetical unit measuring satisfaction
Dominum utile is the right to use something, often used in connection with feudal law in which the King held dominum directum over the land and granted this right to the lords or vassals.

I found a
similar expression called USUFRUCT - The right of enjoying a thing, the property of which is vested in another, and to draw from the same all the profit, utility and advantage which it may produce, provided it be without altering the substance of the thing.

The obligation of not altering the substance of the thing, however, takes place only in the case of a complete usufruct.

Usufructs are of two kinds; perfect and imperfect. Perfect usufruct, which is of things which the usufructuary can enjoy without altering their substance, though their substance may be diminished or deteriorated naturally by time or by the use to which they are applied; as a house, a piece of land, animals, furniture and other movable effects. Imperfect or quasi usufruct, which is of things which would be useless to the usufructuary if be did not consume and expend them, or change the substance of them, as money, grain, liquors.

UNIT TRUST Wikipedia: A unit trust is form of collective investment constituted under a trust deed.
Found in the UK, Ireland, Australia, New Zealand and British Isles offshore jurisdictions, unit trusts offer access to wide range of securities for all types of investors.
Unit trusts are open-ended investments; therefore the underlying value of the assets is always directly represented by the total number of units issued multiplied by the unit price. Each fund has a specified investment objective to determine the management aims and limitations.
 
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