How a less energy-intensive and more regenerative economy will allow the developing the world to advance without breaching ecological boundaries.
In this episode you’ll learn:
- What is the difference between circular and linear supply chains.
- What is doughnut economics.
- What are adaptive preferences and how they led David to trade in a BMW 650i for a Toyota Prius.
- How electric vehicles and the proliferation of solar panels are leading to a less energy-intensive economy.
- How the reduction of litter is an example of changing culture.
The global economy is shaped by our personal economies—the choices that each of us makes regarding what we invest in, spend our money on, and what we consider to be valuable. In this episode of Money For the Rest of Us, David explores why bigger is not always better when it comes to the growth and development of the global economy. Many of us are consumed with the drive to earn more and be more productive, but maybe what we should be striving for instead is a life lived fully and well. Instead of partaking in an economy that creates with wasteful abandon, why not invest in a regenerative economy—one that only creates what needs to be created, fulfilling only what the economy needs.
Trading a linear global economy for a circular one
While the U.S. economy is mostly made up of a linear economic model—one that pushes ever upwards in size and offerings—there are many other economies in the world that pursue a circular model. Reducing waste and promoting a healthy social atmosphere, it is possible to give to the environment as much as is taken from it, creating a sustainable and environmentally-conscious economy. In some aspects, the U.S. economy is incredibly wasteful when compared with others around the world. Instead of recycling our goods, we simply create new ones and throw out the old ones. While recycling certainly exists in the United States, Americans don’t utilize it to its full potential, keeping the economy on a linear track instead of a circular one.
While a circular economy should be the goal, it is important to identify the limiting growth factors of a circular economy. There are constraints. David shares the concept of a “donut economy,” wherein you have the small circle made up of the world’s needs—food, shelter, water, education, health, and energy. The outer circle represents the boundaries set by nature—what the environment can provide. The goal is to create a regenerative economy that satisfies the needs of all the people in the world without penetrating the boundaries set by nature’s capacity for provision.
What are you aspiring to?
Can what we eat, drink, and purchase really make a difference in the global economy? Certainly! David explains that much of what we invest in and purchase has its roots in what we aspire to be and have. The decisions we make influence the world around us—including the economy. Our spending and lifestyle decisions can be disciplined and curbed by the voice of prior experience. Instead of always reaching for the newest thing or latest fad, taking time to question the impact of a decision on a regenerative economy and planetary boundaries will help shape the global economy. David uses the example of a poor purchase choice he made and how it affected his decision later on to make a healthier and wiser purchase. Buying a Prius ended up being a much better decision than buying a BMW 650I. Taking into consideration the cost per mile of each model and the impact each model had on the environment, he reshaped his aspirations and desires to reflect a more regenerative mindset.
Energy transitions can help create a stronger global economy
One of the most needed resources is one of the most wasted in the U.S. economy—energy. Renewable energy sources are best—investing in wind and solar technology will help propel a regenerative global economy mindset forward. Consider how much energy an electric car will use compared to a gas car. The goal is to create an economy that is more efficient, one that uses less energy per dollar of goods produced. The well-being of each individual in the global economy should be the overarching goal of the circular model. Taking part in recycling programs, installing solar panels for renewable energy, and making conscientious purchases can all help build the health of the global economy.
How then should we live?
We have the capacity to change—to retrain our mindsets when it comes to shaping our aspirations and rediscovering beauty. What we consider desirable and beautiful is often influenced by the culture we live in. Our perception of what is good and beautiful is bombarded by what the beauty industry tells us. But who is to say that Hollywood’s idea of beauty has to be the defining opinion. David encourages listeners to define for themselves what is beautiful and to make conscientious decisions based upon whether or not a purchase is helping humanity and the planet or harming it. Invest in quality, not quantity. Consider the “pedigree” of a purchase. Where was the product made, by whom, and at what price? Is your purchase helping foster a beautiful, simple, and regenerative global economy or is it fostering a linear economy? Each person’s decision counts. Each has the power to shape the world.
- [0:20] Creating a global economy that is better—not bigger.
- [3:18] A circular economy is better than a linear one.
- [6:20] The growth constraints of a circular economy.
- [9:08] Being wise in our aspirations.
- [12:55] David’s Tesla experience changed his perspective on investments.
- [14:52] The power of energy transitions.
- [18:02] Making more economical choices concerning energy transitions.
- [20:04] How are we judging our well-being?
- [23:07] Redefining what we consider beautiful.
- [24:17] Making a better global economy begins with you.
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