Sustainability

It's a word that has gotten a lot of attention in the past 10 or so years.  We have finally discovered that we have the power to essentially use-up the world's resources.  Of course none of us want that, but Jason Clay offers a "solution" (PS - I love TED) :




I see some problems with this philosophy though.  I appreciate the progress he is making, and I agree that we need to address this issue of diminishing resources and growing population, but I don't think the solution is as simple and neat as Dr. Clay believes.  Here's the way I see it:

Private Business is a competitive environment.  Without short-term profits, a company will struggle and die at the hands of companies who will sacrifice long-term access to resources for short-term competitive gains.  For example, Company A has an idealistic CEO who leads his company in the direction of sustainability.  He says, "We will no longer support any environmentally or ecologically detrimental suppliers, and we will conduct business in a manner that will conserve as many natural resources as possible."  Sounds great...

Meanwhile, Company B - a similar company - has a more traditional capitalist serving as CEO who's goal is to drive out competition, and maximize profits for expansion and reinvestment.  He knows about Company A's new goal of sustainability, so he decides to fight fire with fire.

Company A may be able to make a great marketing campaign to promote their new commitment to sustainability, but being that they are bound to have larger materials costs since they are no longer buying from "traditional" suppliers, their profits will likely falter.  Meanwhile, Company B launches a marketing campaign promoting their lower prices, and then puts a little side bar about their new "green" packaging (mostly just marketing fluff, but the consumer doesn't know any better).  Company B has lower costs, and sells their product for a significantly lower price, plus they too have some interest in saving the environment.  What happens next?  Since this is hypothetical, there's not a right answer, but I'm putting my stock in Company B.

My point is that companies will not buy into this 100% sustainability if they will lose money from it.  That's just Econ 101.  It doesn't matter if the resource you are taking from the land will be gone in 75 years; if you are a well-run business, you will have already foreseen this, and redirected your investment into another channel by then.  We have made some gains in environmental awareness in the past decade, but those have been far outweighed by increasing population, and the boom of industry in the developing world.  Maybe I'm just a skeptic, but I have very little faith in Dr. Clay's solution.