The Club of Rome `Factor Four' is unusually interesting and thought provoking. The report seeks to explore and promote the more efficient use of technology by industry and individuals to `doublewealth and halve resource use'.

The basic concept explored in the report rests on the premise that through greater efficiency, more can be produced for less. The key to achieving this,according to the authors, is resource productivity. Seven major reasons given in the report for seeking resource efficiency include: living better; polluting and depleting less; making money (or spending less); harnessing markets and enlisting businesss; multiplying the use of scarce capital; increasing security; and, achieving greater equity and increased employment.

The report is essentially aimed at promoting practical changes and much of the report is taken up in detailing examples from around the world where resource productivity has already, or could in theory be, quadrupled. The report also examines how the efficiency revolution can practically be made to happen. The authors contend that while the inherent defects of market operations cause many of the problems, these same markets can, nevertheless, also provide the necessary solutions. The basic principles involved include: finding the best (cheapest in resource use) way to do the job; investing in saving resources wherever that is cheaper than extracting them; creating markets in saved resources; using thruthful price mechanisms; fostering vibrant competition between all options on a level playing field; rewarding desirable modes of behaviour; taxing the undesirable not the desirable; and scrapping inefficient devices prematurely to replace them with more efficient ones.

Efficiency can, the report's authors insist be bought - quoting the experience of the US electric utilities industry as an examples. In the 1970s, the US Congress opened electricity generation up to competition and the utilities faced obsolescence if they did not provide their customers with cheaper electricity. Customers wanted energy provided reliably, conveniently, and as cheap as possible and saved electricity was found to be cheaper than the cost of generating additional amounts of 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 US 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. Not all companies, however, particularly those in a monopoly situation, devoid of all prospects of competition, might adopt such a benevolent view. Some might exploit improved environmental performance as a means of increasing the acceptability of consumer price increases - ignoring any long term savings in ongoing operational costs. Such behaviour would, for example, not be difficult to find in the UK water industry.

Examples of innovative lateral thinking abound in the report. The concept of rebates, for example, is explored. This is where a customer receives a rebate or changing to a more efficient model and could be applied to a wide range of consumer goods from cars and refrigerators to variations on leasing arrangements.

Transport is another area in which lateral thinking and some new 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, for example, the cost of travelling by car is borne by the car users themselves and a daily charge is applied to those driving into the city centre. 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, the feebate system is used to reward environmentally positive behaviour with a rebate - paid for by those paying fees. Once again the system is potentially applicable to a wide range of goods and service and transport.

If you didn't already know it you will learn by reading this report that, in Germany, strawberry yoghurt and the materials used for its glass cup made accumulated journeys of 3,500 km - with another 4,500 km for the supplier's supply transports. There is no real surprise in such material flows save that it serves to show that even in a country with abundant strawberries and milk production, such products rarely (perhaps too rarely) come from just round the corner ! However, by encouraging a switch in consumption from orange to blackcurrant juice a factor of ten could easily be gained in transport efficiency. The report also, somewhat more conventionally, considers the challenges presented by the 1992 Earth Summit. Factor Four argues that the problem of pollution control should be tackled at the originating source not at the end of pipe. A more efficient production line produces fewer polluting substances and reduces the cost of pollution control - a message that thankfully has already been taken on board by both industry and government in many countries. However, the main message behind Factor Four's `double wealth, halve resource use' slogan is nevertheless at risk of being ignored either because of the unconventional nature of its message - encouraging the application of innovative thinking to environmental problems, for being too complicated, or simply because the end result is too dependent upon changes in human behaviour which are all to often perceived as being too difficult to bring about.

There is also a not unsubstantial risk that governments may have too little incentive to implement or encourage the of innovative thought - because much of modern government thinking is fixated only on solutions with the potential to generate additional tax revenue. The sort of environmental questions raised by the manufacture of strawberry youghurt and consumer preferences for fruit juice are indicative of modern industrialised societies but are really only likely to be fully addressed if all governments establish a Ministry of Lateral Thinking. Society, Factor Four argues, has perhaps been looking at material flows from the wrong end altogether. Technological progress has made prospecting, mining, processing and shipping of material resources ever more efficient and ever cheaper in terms of conventional economics and we have to address, control and decrease the material flows. Sadly, the authors of the report recognise that the Factor Four transition is not going to happen under the market conditions prevailing in OECD countries so I'm not exactly sure where that leaves us - except with the recognition that `the resources that we need most urgently to rediscover and to use more fully and wisely are not in the physical world, but remain hidden within each one of us' with which the report ends.

©Peter Doyle BSc MSc.