Factor Four: Doubling Wealth, Halving Resource Use - The New Report to the Club of Rome (Paperback)

The basic concept explored in the book rests on the premise that through greater efficiency, more can be produced for less. Resource productivity is, according to the authors, the key. In the introduction, the authors list seven reasons for seeking resource efficiency:

Live better;
Pollute and deplete less;
Make money;
Harness markets and enlist business;
Multiply use of scarce capital;
Increase security; and,
Be equitable and have more employment.

The book is essentially aimed at promoting practical changes and half of the book is taken up in detailing 50 examples from around the world where resource productivity has already, or could be, quadrupled. Twenty examples are presented of revolutionising energy productivity. These range from hypercars - super efficient light alloy cars; to super windows for office blocks, refrigerators, office lighting, equipment and air conditioning. Twenty further examples are given of revolutionising material productivity in irrigation systems, water efficiency methods and ideas for reducing material flow in industry, to a new type of plastic material, reuse and increased use of wood in construction. Finally, ten examples of revolutionising transport productivity are given including video-conferencing, car sharing, rapid trains and consideration of transport involved in moving food from farm to supermarket.

Part two of the book looks at how the efficiency revolution can practically be made to happen. The authors contend that even though the markets, and how they work, cause much of the problems, at the same time the markets can also provide the necessary answers. The basic principles involved include:

Find the best (cheapest) way to do the job and buy it;
Invest in saving resources wherever that is cheaper than extracting them;
Make markets in saved resources;
Use prices that tell the truth;
Foster vibrant competition between all options on a level playing field;
Reward the behaviour you want, not its opposite;
Tax the undesirable, not the desirable;
Scrap inefficient devices prematurely and replace them with efficient ones.
Efficiency can be bought. The US electric utilities industry is a case in point. In the 1970s, the US Congress opened electricity generation up to competition. The utilities faced obsolescence if they did not provide their customers with cheaper electricity. This cheaper electricity was to be produced using increased efficiency. Customers wanted energy provided reliably, conveniently, and as cheap as possible as saved electricity was cheaper than the cost of generating more electricity.

In the early 1980s, in order to further encourage the utilities to use more efficient ways of producing the same amount of electricity or even reducing output, some states decoupled profits from sales volume. During the next decade the regulations evolved until an acceptable system developed in which the best buy for the customer was also the most profitable investment for the company. In effect, any savings were shared and the company's profits were no longer linked to how much energy it sold.

The concept of rebates is also explored where a customer receives a rebate for changing to a more efficient model, whether it is a car or a refrigerator or even a variation on leasing arrangements. This concept takes us on to the next section where the authors discuss ways of rewarding positive action rather than the opposite. Consideration is given to integrating the whole team involved in architecture, design and engineering new products or buildings. If designers were rewarded for any efficiency savings their design made possible, rather than purely as a percentage of the cost of the project, then there would be more incentive to develop new and innovative ways of tackling the problems faced by industry.

A simple device to encourage industry to clean up its effluent discharges would, according to Factor Four, be to require water inlets to the factory to be downstream of the outfall. Then any polluted water would be returned to the factory thus presenting the company with a huge incentive to ensure that the outfall is as clean as possible.

Transport is another area in which lateral thinking and some incentives could bring about a decrease in the volume of traffic on the roads and an increase in the use of public transport. In Singapore, the cost of travelling by car is borne by the car users themselves. A charge is made per day to drive into the centre of the city. If the car owners wish to drive they must pay for the cost of the associated pollution but at the same time the public transport system is such that it is mostly unnecessary to use the car. The concept of feebates is linked to this in that certain behaviour could be discouraged ( as car driving in Singapore is) but at the same time, using the feebate system, environmentally positive behaviour could be rewarded with a rebate paid for by those paying fees. This system could be applied to transport, industry, emissions, exchanging goods for more efficient models etc.

Ecological tax reform or green taxes are attracting growing support worldwide and there is scope, according to Factor Four, for greater harmonisation across frontiers.

The third part of the book looks at the challenges from the Earth Summit in Rio in 1992. The problem of waste disposal, the associated costs and ecological impacts of providing the raw materials needed by industry, and the cost of pollution control. Factor Four argues that the problem of pollution control should be tackled from the other end - production and not just as an end of pipe solution to a problem. If the production line was more efficient then less polluting substances would be produced, thus, reducing the cost of pollution control.

In the final section, the authors consider a brighter future where trade and the environment are compatible, where the market economies evolve to take environmental considerations into account and the intangible non-material wealth of our lives is increasingly valued.