The Age of Sustainability - Issue #3

Population drives demand for infrastructure and for sustainability and we’re witnessing the strong demand for more infrastructure right now. The old conservative idea of supply side economics never got it right because it tried to ignore demand and only focus on supply. If you do that supply gradually tightens (as it has been doing for 40 years) leaving you with an economy where to providers of increasingly tight resources can name their prices. This doesn’t work very well with infrastructure because the supply of it falls apart while leaving demand untouched. In other words a big problem.

Population growth drives demand and crumbling infrastructure leaves us with dangerous situations everywhere. It also opens up creative opportunities, like desalination.

Capitalism depends on organic population growth to produce ever larger markets, but what happens if population goes in the other direction? Today, mainstream markets have fallen to organic or replacement growth rates and the more interesting action happens in new markets and new industries. The computer industry has been more interesting than steelmaking for instance for a long time. But even computers and software or call it the information technology industry is commoditizing and prices and margins are falling. That’s why disruptive innovation is so important. Disruptions create new markets that can grow exponentially and produce great profits. They also create jobs because often, a disruption won’t diffuse to the greater population without effort. So we string cables, dig trenches, lay roads and build new buildings to accommodate disruptions. If birthrates tumble, and it would be good if they did because earth has a carrying capacity of about 10 billion people, we’ll need more disruptive innovations to keep the economy going. Sustainability in all of its forms provides this kind of rolling disruptive opportunity.

So, LA is in a fight over water. Nothing new here, ever see “Chinatown” with Faye Dunaway and Jack Nicholson? But now there’s an interesting juxtaposition between fighting over water and making more of it. It’s an interesting dynamic because with 10 billion people predicted on a planet that’s short on freshwater by 2050, we’re gonna need to make our own. That’s why the Carlsbad desalination plant serving San Diego is so important. For half a penny per gallon Carlsbad literally pumps out 50 million gallons of freshwater per day.

You might not think of this as a part of sustainability, but it is and that’s why when we talk about infrastructure, we’re way past only thinking about roads and bridges.

I didn’t expect this but the infrastructure plan being promoted by the Whitehouse has people in red states paying attention because they know who much in need they are of infrastructure improvements.