Are there any truly sustainable business models?

Question

I would like to start a sustainable ecovillage, but am worried about the ad-hoc nature of so many previous attempts that often assume we will just all "get along" without a formal structure.

While "business model" may seem oxymoronic to such a venture, I hope to find what it will take to make sure the participants can continue to be productive and successful without the entire organization either withering into insignificance or morphing into yet another typical corporation.

I also view the cooperative approach as hardly any different from capitalism, so would rather not just hand the thinking over to that tired approach.

Answer 1

This is an interesting question. The way I read your question is, "how can we create a sustainable economy in an ecovilage?" Obviously the modern economy which is based on excessive consumption is not sustainable. However I think one can look to the past (and other places today) for insight in what to do differently. I don't expect also that EnergyNumbers and I see eye to eye on this issue so maybe he can post a different alternative too. I think you have to reduce both consumption and production to make this work.

In general you have several things that make sustainability a problem. The first is complexity costs. The more complexity is involved in the production of things, the more resources you have to consume to produce them. This is one area where Capitalism causes problems, because you have a significant number of people involved in administering an enterprise which are not actually producing anything. This is also a problem with complex governments as well. If a government eats up 40% of GDP, that means that you have to nearly double per capita production in order to meet the needs of the civil servants. Extensive, complex governmental structures, like extensive complex corporate structures are ways to avoid overproduction crises by throttling production. Management and government eat up your excess and demand more in the future. So the key thing here is to control your excess.

Before the industrial revolution, and in countries like Indonesia today, you have low complexity costs. Governance is local and close to home, and families are essentially mini-states. Most people were self-employed. In fact in Indonesia today, 70% of the population is self-employed and my experience is that there is actually less poverty (in terms of homelessness and food insecurity) than there is in the US.

The second problem of course is waste management. Traditionally instead of throwing something away you sell it to someone who needs it. A broken shovel might be repaired, or it might be sold as scrap. Planning for waste management in a way that channels as much waste back into production is an important aspect of what you are doing. Fortunately with less production, this is a little easier to do, and frugality is a little easier to justify.

In order to implement this I would suggest a few things:

1. Widespread distribution of private property (which is the rule in Indonesia, and was the rule in the late Middle Ages). The ecovillage should be private instead of fully communal. This puts people in charge of their own lives and productive aspirations.

2. Integration of work and living spaces. This throttles production by ensuring that family and work are not separate, and it helps foster self-employment, where the individual bears the complexity costs directly.

3. Community upcycling events to help ensure waste gets recycled into more useful roles.

4. Infrastructure (roads, electrical generation, etc) however should be socialized by the local community. This helps protect the wide distribution of private property.

Answer 2

The big issue I see with such a "sustainable ecovillage" is what I call the long term impedance mismatch between the village and the external environment. So while I am pessimistic (and I think you are right to be "worried"), lots of people are trying it. Many are in the US.

In what way could we seek to establish a sustainable ecovillage?

• Ecological sustainability
  The village uses only those resources it produces. Production can be primary, secondary, or tertiary.
  If the village is to be sustainable at the primary level, it needs about 1.5 hectares per person. The amount can vary according to the natural fertility of the land. Primary production includes crops for food and raw materials (examples could include cotton, flax, timber), animals (perhaps fish, cattle, sheep, goats, silk worms), and timber. Notice that I have excluded minerals; although we might like to use clay and other minerals, they are a finite exhaustible resource.
  The secondary level of production may include clothing and housing. We could imagine clothing made from leather, wool, silk, cotton, or linen. We could imagine timber furniture.
  The tertiary level is services. We can imagine everyone turning out to help with seasonal activities, providing their services to plant or harvest crops. Other more specialized services could be provided by teachers, midwives, etc.
  The issue is that without external inputs, for example steel artifacts, we don't have horse shoes, axes, plows, knives, etc. Perhaps we can make substitutes for some items, but what do we do without glass, and other manufactured items requiring heavy industry? This is a rhetorical question. The answer, of course, is that the village must trade with the outside world.
• Economic sustainability
  We have established that the village must trade for articles it cannot produce. (This opens a different question: do those articles come from sustainable sources, or do they use finite resources? Clearly, at some level, they use finite resources.)
  In the short term, We might imagine that the village operates a farmers' market, where the surrounding population could trade with the villagers for primary (and also secondary) produce. In the short term, we could imagine that this could achieve an economic balance.
  But in the long term we must consider that people age, become unwell, relocate, commit crimes, have children, and all of life's non-ideal issues. We must provide health services, and deal with the lazy, the crazy, the criminal. These services are costly in our current society. It is not clear (to me) how these costs can be sustained by the village, unless it is fully engaged in the wider economy.
  Further more, as people age, will they stay? As children age, will they stay? How will the village maintain it's population? This has been the Achilles heel of such attempts, and is an ongoing problem for rural populations. How will we ensure that the future population follows our "rules"? We cannot, because our rules cannot be complete and cater to all possible contingencies.

So there are significant challenges. We have not even mentioned the question of what technological level the village will use. If we use high-tech items such as computers, mobile phones, solar cells, or even lower tech items such as wind generators, tractors and other machinery, we extend the question of what is sustainable? No matter how good our recycling efforts, finite resources become depleted. This, of course, is the world-wide problem that Sustainability.SE serves.

The big issue, it seems to me, is that this is being analyzed as a self-contained entity. It cannot work that way, any more than any other village does. Any village has it's rich, poor, workaholic, lazy, more ideological and less ideological. People move in and out. Land is bought, sold and rented. Some people have cars, trucks, and tractors, others use bikes and draught animals. Kids grow up and move on. Some return. But every village has it's own character. It is made up of the sum of the character of the inhabitants.

My advice is to just do it. Find an existing community or just a few like-minded people, and get started. Add your weight to theirs. Actively promote the sustainable culture. Lead by example. Be inclusive rather than prescriptive.

In Australia many villages have collectively chosen a particular focus, mostly to project a clear identity that can attract like minded people and tourist trade. While these are not Intentional Communities or focused on ecological sustainability, they are economically sustainable; a few of the many examples of where this is working include Nimbin, Milawa, Yarragon, Darnum, and many parts of Tasmania. You'll notice I've used tourism links, that emphasize the character of these places.

Answer 3

As EnergyNumbers pointed out as a comment, it is a bit unclear what you are actually asking. My understanding is that you are trying to understand what needs to be done in order to develop a 'sustainable' community. I can provide you with a few examples of successful sustainable solution examples: two through sustainable water system designs and one through a business model that encourages environmental and social values.

For the business aspect, my advice is that you read into the triple bottom line (wikipedia) concept of a business: that's how to bring in social and environmental aspects as part of the accountability and value-generation of a business. There are many examples (the linked document explains some aspects of stakeholder participation) of ways in which sustainable solutions can be brought within a community to ensure their success (you can have a read through some of USA's EPA sustainable water papers).

Regarding sustainable business models, a good example of this is riversimple (riversimple.com), a company that is working on developing a new type of hydrogen-fuelled vehicle. They bring in the incentive to accommodate for social and environmental aspects as part of their profit-making strategy in their business model.

Their concept is to sell their cars on a monthly contract scheme, just like that of mobile phones. That is: the company (riversimple) pays all the vehicle costs and all fuel costs, just like a mobile phone contract provider provides the handset as part of the contract and pays for all communications cost. All the user has to do is to pay a monthly fee.

The way this business model enhances environmental and social values is by leveraging the market forces: 1. Environmentally The company is forced into designing very efficient vehicles, that use very small quantities of fuel in order to reduce their costs (and increase profits) otherwise they go bankrupt very quickly. 2. Socially There is currently much difficulty in creating a market for electrical/hybrid/hydrogen cell vehicles, and this is partly because of the majority of the public not being confident in the technology. The way riversimple would tackle this is by making it very simple and easy to use their vehicles in an urban environment.

It would be great if you could explain better what you wish to achieve with your ecovillage.

Answer 4

Your question is slightly vague so I'm sorry of my answer is. Since corporate and capitalistic models don't work for you, I tend to agree, look into WSDEs or worker self directed enterprises. You might find a model that works for you.

http://www.rdwolff.com/content/who-needs-boss

http://www.democracyatwork.info/learn/?topic=form

Worker self directed enterprise is basically employee owned business. The employees are the stock holders, they direct the company and split the profits, decide when more employees are needed etc.

During hard times a company like this may choose to cut hours or have everyone work four days a week rather than lay some people off. There's a great deal of info out there on it with a search and this little I've added doesn't do the system justice.

Answer 5

As this is hard to ask... is hard to have an answer but I think there is a couple of things we can discuss.

First we may agree that sustainability is in terms of the resources we directly need to live. We don't eat money right? The profit is related to the scarcity of a product/service. That's why it is a oxymoron (maybe on purpose) this word in business models.

Now, building an ecovillage(permaculture)... I've seen so far two general approaches that actually practices sustainability(or a part of it):

1. Residents sacrifice some of the standard quality of living in order to gain sustainability. (i.e. maybe eating less meat, reducing variety of food, trying alternatives or spending time looking for new ones). The people I met that fits this profile are great! With a global culture with a lot of creativity. This approach tend to isolate great alternatives and some parts of the living because it is contrasting with the standard living. You may find some practitioners in your community.

2. Residents apply technology to gain sustainability. Usually this approach focus only on one or two resources(i.e. water, energy). It is hard to cover all the resources (we actually don't have a measure for sustainability). I've seen great efforts creating a new formal strucutre in the Venus project community(thevenusproject.com) and you should be able to get more info about it.

Building an ecovillage should mean experimentation before we could get a complete formal social structure. And maybe will be formed from incomplete approaches.