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The world’s economy is on
the brink of financial meltdown, thanks to the corrupt Wall Street money and
banking system unleashed by deregulation in the 1970s and 1980s  (“Shut Down Wall
Street!”SiS 53). Emerging
from the ruins is a new socially accountable economy that can provide good jobs
at living wages, and generate real wealth for people and communities, at least
in the United States  (New Economy Now, SiS 53). But that is not enough, we need a
truly green circular economy working with and within nature to generate andregenerate wealth for people and planet.
few years ago, very few people would take green or circular economy seriously.
Not anymore; governments and businesses are now outdoing environmental groups
in claiming the green circular economy for themselves. So perhaps it is time to
put down some goal posts to make sure we get there.
Circular economy now
I have been
arguing for the “circular economy” for several years, and first used the term in
2006 to describe a sustainable farming system  (Circular
Economy of the Dyke-Pond System, SiS 32), but it did not originate with me. During a
study-lecture tour in China, I gave a talk on my ‘zero-entropy model of
organisms and sustainable systems’ (see below) at the Guangzhou Institute of
Geography in Guangzhou, Canton Province. Prof. Zhang Hongou, director of the
Institute, told me afterwards that what I had been talking about was the
“circular economy” of mainstream Chinese thinking, as opposed to the dominant
linear economy of the West.
“Circular economy” was a Chinese government
initiative launched in 2004 and targeted at the manufacturing and service
business sectors. It exhorted the sectors to enhance the economy and the
environment by collaborating in managing environmental resources, so “one
facility’s waste, including energy, water, materials (as well as information),
is another’s input” . This became government policy with the Circular
Economy Law of 2008, albeit with aspirations considerably watered down .
The term “circular economy” has since caught on. It
features prominently on the webpage of the Ellen MacArthur Foundation in how we
should rethink the future . Recently, it was liberally used by speakers at a
public conference organised by the UK group Green Alliance . Secretary of
State for Environment, Food, and Rural Affairs Caroline Spelman spoke
enthusiastically of building the “New Green Circular Economy” in partnership
with business , and said UK has already produced its own Green Economy roadmap
 ahead of European Union’s resource efficiency roadmap to be published early
in 2012 .
The major driver of the circular economy is not so
much environmental concern as the soaring prices of commodities that seriously
threaten growth in the business sector. European Commissioner for the
Environment Janez Potočnik put it more starkly: improving resource use is
not just an environmental imperative; it is an “issue of survival” for
businesses , as for the planet.
Potočnik reminded those - who still think that
protecting nature is bad for business – of the tens of billions euros lost from
flooding because environmental assessments were ignored. Circular economy, he
said, is a “marriage of necessity” between business and the environment.
Spelman concurred : “Being green saves money and makes money.” She mentioned
new research by the Department of Environment, Food and Rural Affairs (DEFRA)
that shows how improving resource use efficiency can save £23 billion for the UK and reduce its carbon emissions by 4 % a year. And according to the latest McKinsey report,
globally, the savings could be as much as a total of US$3.7 trillion by 2030,
plus half the global carbon emissions .
Spelman  was the only speaker who made reference
to natural cycles, specifically the water cycle so vital to life (see Box). Actually
circular economy and life are much more intimately connected.
Korten, co-chair of New Economy Working Group (NEWGroup) in the US and chief architect of its New Economy Agenda [1, 2] is also promoting ‘living
economies’ that imitate life [13, 14]. He has identified practically all the hallmarks of a living system
that I presented as the circular thermodynamics (and quantum coherence) of
organisms, especially in the latest 2008 edition of my book  The
Rainbow and the Worm, The Physics of Organisms. In other words, what Korten prescribes
for the new economy are not just desirable features from a moral, ethical, social
perspective. They are the physical properties of living systems.
thermodynamics and green living economy
the science of material and energy transformation, the circular thermodynamics
of organisms is therefore none other than living economy: the transformation of
energy and materials that enable organisms including human beings to survive
Circles imply dynamically closed systems, closed loops or cycles, in
which resources are regenerated and reused. More importantly, a cycle
goes around and returns to the same point, and a perfect cycle in
thermodynamics is perfectly efficient and does not generate wastes. Instead, it
regenerates and renews itself indefinitely, using renewable energies, mainly from
Nature is replete with cycles (see Box). Organisms are entrained to
the natural cycles of Earth, and are also dominated by cycles as biological
rhythms in physiology and metabolic cycles in biochemistry.
Earth goes back 4.54 billion years , and life may have originated
soon after, as early as 4.38 billion years ago . Since then, life has
multiplied and evolved to colonize every ecological niche available on Earth,
including extreme environments : high salt, high acid or alkaline,
hydrothermal vents > 100 ºC, and permafrost at -15 ºC.
Life on Earth is possible at all because liquid water
is present; but it also depends on the ability to capture energy for
transforming inanimate materials into living organisms (or biomass). This
ability is developed to the highest degree in photosynthetic green plants,
algae, and cyanobacteria, which capture the inexhaustible energy of sunlight to
split water, transforming carbon dioxide into carbohydrates and biomass and liberating
oxygen into the atmosphere for the benefit of aerobic organisms . Aerobic
organisms obtain their energy for growth and reproduction by using oxygen to
turn carbohydrates back into carbon dioxide and water in the process of
respiration; and this completes the cycle that supports nearly the entire
The cycle of photosynthesis and respiration fuelled
by sunlight in turn depends on the biogeochemical cycles that transfer and
transform chemicals between the biosphere and the inanimate geological realm of
rocks, soils, atmosphere, and water . The main biogeochemical cycles are
those of water and the elements carbon, phosphorus, nitrogen, sulphur, and
oxygen, which is part of all cycles. All the cycles intersect and interact to
In addition, Earth has its own cycles to which the
biosphere is entrained: the cycle of day and night as it rotates on its axis;
the lunar cycle of ~29.53 days that the moon takes to orbit around Earth; and
the tilt of Earth’s axis of rotation that gives the yearly cycle of the seasons
in Earth’s orbit around the sun.
Nature is replete with cycles. Cycles mean renewal
and regeneration for Earth as for organisms and ecosystems whose rhythms are
tied to those of Earth. Most, if not all our environmental problems come from
disrupting natural cycles by using up resources or generating wastes faster
than the natural cycles can accommodate. Top of the list is burning fossil
fuels and generating CO2 faster than the photosynthetic organisms
can absorb, resulting in the increase of CO2 in the atmosphere and
global warming (see  Global Warming Is Happening,
Practically all biological activities are in cycles: those yielding
energy being directly coupled to those requiring energy, and the giving and
taking can be reversed as necessity arises. Furthermore, the activities occur
over the entire range of space times, so no essential activity is left without
energy at any one time. For example, running away from a tiger incurs a
local energy debt particularly in the leg muscles that gets repaid afterwards,
in the event of a successful escape. To do that requires perfect intercommunication
and coordination, as well as reciprocity or mutual aid between the different
tissues and organs within the body.
These were some of the considerations that led me to my ‘zero entropy’
model of organisms that has been generalized to sustainable systems 
(Figure 1), entropy consisting of waste heat or dissipated energy.
Figure 1 Zero-entropy ideal and renewable closed
loop resource use for maximum efficiency and minimum waste
The equation SDS = 0 inside the circle means no toxic
wastes accumulate inside due to the 100 % efficient material and energy
transformation achieved. The equation SDS ≥ 0 outside
means that the toxic wastes exported are also minimized to almost zero as a
result. This is the essence of being green, as organisms depend on the
environment for input, minimizing the wastes exported to the environment allows
the environment to regenerate itself so that it can sustain the organism.
course, real cycles are never perfect, or else organisms will never grow old
and die, but the ideal ‘zero-entropy’ state can be be approached as closely as
possible, through judicious reuse and regeneration of resources. That is precisely
what some in the manufacturing industry are attempting to do (see  Closed Loop,
Cradle to Cradle, Circular Economy & the New Naturephilia, SiS
structure of entangled coupled cycles
zero-entropy state depends on the main life cycle of the organism or
sustainable system being composed of coupled cycles in a fractal
structure (Figure 2).
Figure 2 Fractal structure of entangled coupled
cycles maximizes diversity, symbiosis, reciprocity, cooperation and equity for efficient
resource storage and use
A fractal is a physical or dynamical structure with
fractional dimensions instead of the usual 1, 2 or 3; it can be split into parts,
each of which is a reduced size copy of the whole, a property called self-similarity.
The fractal structure bridges all space times
and is typical of organic systems and processes. I suggested that it is optimized
for capturing, storing, and mobilizing resources efficiently and rapidly while conferring
local autonomy on all scales (see  and my new book  Living Rainbow H2O, ISIS/WS
The structure also maximizes diversity: numerous
small entities scaling up to very few large ones. Old mature forests tend
towards this ideal ‘all size’ distribution  (Multiple Uses of Forests,
SiS 26), and are more productive and diverse. It could be that a distribution supporting the
greatest diversity is also the most equitable, and makes the most efficient use
and mobilization of resources; but this hypothesis needs to be thoroughly
examined and tested.
Another key feature (already mentioned) is that
activities requiring energy or material are coupled to those that generate
them; and the giving and taking can be reversed as the need arises. In
other words, the system maximizes symbiosis, reciprocity and cooperation. It
is fair and just reciprocal exchange of materials and energy that maintains and
ensures the survival of the whole. Perhaps this is the biggest lesson for
the commercial sector that has hitherto operated on exploitation and
This raises the question on the medium of exchange.
In human economy, money has become the medium of exchange for goods and
services, replacing trust and goodwill. Goods and services have their obvious counterparts
in living systems as materials and energy. But what is the equivalent of money
in living systems? Is there such a thing?
living systems versus money in human economy
The medium of
exchange in the living system - the equivalent of money in human economy - is a
special chemical species adenosine triphosphate (ATP), which many cell
biologists and biochemists have equated with money. It is the universal energy
transducer in living organisms, so much so that its concentration in cells is
maintained constant as far as possible by a reserve molecule creatine phosphate
(CP), which is allowed to deplete, and its sole function appears to be to keep
the supply of ATP constant. ATP has a very special role in maintaining the
living state .
itself is synthesized using energy from food stuffs or from sunlight, and never
from nothing. In other words, ATP, the medium of exchange of goods and
services in the living system is never decoupled from material and energy
cycles, and that is where the analogy to money ends, at least in the current
In our current human economy, money is being created electronically
practically out of nothing, without limit or control; or worse, out of toxic debt
and debt pyramids . It has become completely decoupled from real goods and services. As such,
it is more like the toxic waste energy or entropy that poisons the economy, and
worse, generates real entropy in Earth’s ecosystem when used for
overconsumption and exploitation of natural resources.
is ultimately why we need to “shut down Wall Street” .
The new truly green
economy is a complete way of life
There are two aspects to
the new truly green economy. The first is to learn from nature and living organisms
how to structure the money and banking system for the survival of the whole,
and the second is to support renewable, closed loop approaches in all sectors
of commerce and industry. The two aspects are closely intertwined.
structuring the money and banking system, we need all levels of locally
accountable financial institutions that support community projects towards
greater equity and sustainability. The NEWGroup proposal to replace big Wall
Street banks with a system of community banks, credit unions and state banks
makes a lot of sense . But most of all, we need to ensure that money is
never decoupled from the value of real goods and services. The NEWGroup has
already suggested that all creation of money should be linked to the support of
infrastructure (see ). The green economy would go one step further: the
creation of money would be tied to supporting green infrastructure
projects, such as city public transport based on biogas/solar electric
vehicles, green corridors for pedestrians and cyclists; excluding for example,
big dams, coal-fire station, and so on. Similarly, it will play an active role
in divesting investments into all sectors of green commerce and industry
beginning with organic agro-ecological farming ( Food Futures Now: *Organic
*Sustainable *Fossil Fuel Free , ISIS/TWN publication), renewable and
sustainable energy use ( Green
Energies - 100% Renewable by 2050, ISIS/TWN publication), green buildings
and retrofitting existing buildings to be green and energy efficient , the
adoption of closed loop, cradle to cradle manufacturing and service industries ,
maximizing cooperation and reciprocity between companies in closing resource
loops (as in China’s original circular economy initiative); and above all,
national healthcare with special emphasis on primary healthcare.
Governments not only
need to set realistic and strict targets and roadmaps towards the truly green
economy, they must provide proper legislation to discourage or penalise the
generation of wastes and incentivize efficient, closed loop resource use,
especially community projects that eradicate poverty and increase equity and
sustainability. Most of all, they must remove distorting subsidies on
unsustainable resource use. Subsidies on fossil fuels, for example, cost Europe €50 billion a year in tax breaks for company cars alone .
Contrary to what many economists assume,
an economy that genuinely supports livelihood is not just about the flow of
money; it is about people making a living transforming and exchanging materials
and energy, and is therefore closely aligned with thermodynamics. Money is the
means for the exchange of real goods and services, and not the end of economy. It
must never be decoupled from the value of real goods and services. Major disasters
like the current financial crisis come about because money has been created
without control, and ultimately because people mistake the means for the end.
The thermodynamics of
the living state  – the science of energy and material transformation in
living organisms and sustainable systems – gives ample support to the following
features of a truly green economy.
The green economy is
a renewable, closed-loop resource use model that includes agriculture, the
energy, construction, manufacturing, and service industries, as well as
finance. It is a complete way of life
Like nature, the
truly green economy maximizes diversity, reciprocity, symbiosis, cooperation
and equity; greed and inequity are unsustainable
A truly green
economy is embedded within nature’s economy
It regards nature as
the ultimate source of ‘natural capital’ (Paul Hawken’s Ecology of Commerce
), which must be regenerated and indeed, increased, in order to feed all
sectors of the human economy.
Joan Shields Comment left 11th January 2012 23:11:52 The resources are there, this is an idea that's time has come. Thanks to social media, more are aware of harms to humans, animals & soil. This earth is our greatest resource and corporations are not just to blame. People need to take more responsibility of their own environment, and need to sign the petitions put forth to our reps. I'm saving this article on my desktop, for reference.
Todd Millions Comment left 15th January 2012 11:11:20 This is an approach that I've followed for years.There are some new wrinkles-the PR engineering has always being a problem and some hoary lies are still dogma(see;nuke power programs),others are screw overs of old true datums-I have for instance ;just being able too track down the 4-5% thermal efficiency figures for vechiles used by quite reputable sites(RMI),These BS figures come from test stand figures done by the society of auto 'engineers'-who don't use them when they will be challenged.The reality based averages based on heat content of fuel,for mass run at average speed figures used in pyshics texts from 1930's on-are still true even as they have being de emphisised over time.The pathetic 2% thermal efficiency hasn't budged for IC vechiles till the last few years-with the use of 1910 miller cycle engines mated to CV transmissions.None of these yet reach demonstrated 12% levels seen in the Righley XR3 or volkswagen L1.
Stan Cox covers why very well in his essay-'Green as a blackjack table'.
This holds for self heating and self chilling buildings(see;BFI-'shelf chilling DDU,1940.And Passive annual heat storage by John Hait 1983.).
I suspect that the bankers AND the plumbers will have too be impaled on poles before these are seen.So don't burn the really knarly old fence posts yet-the may have one more use-before the stove.