ContentsThe Visible Hand 2

Lemons to Lemonade 4

Seeing the (Ultra)Light 5

Read the Manual 6

The Kane Mutiny 7

A Little Help from Its Friends 8

Taking It to the Bank 9

1997 Financial Recap 10

Institute Supporters 11

ROCKYMOUNTAININSTITUTEN E W S L E T T E R

Wendell Berry’s 1981 book, The Gift ofGood Land, contains an essay that

should be required reading for everyone con-cerned about the environment. And even forthose who think they aren’t.

Berry titled the piece “Solving forPattern,” but he might just as well havecalled it “How to Solve Problemswithout Making Things Even Worse.”Ostensibly about farming practices, itamounts to an all-encompassing man-ifesto for right action.

Berry’s gripe is with the moderntendency to define problems narrow-ly, without bothering to understandtheir causes or connections, and thenblow them out of the water withindiscriminate technology. Shoot first,ask questions later. Nuclear powerand nuclear bombs, dams and DDT,urban renewal and suburban zon-ing—each answer, initially a breakthrough,brought with it a host of unforeseen newproblems.

“The whole problem must be solved,”Berry cautions, “not just some handily iden-tifiable and simplifiable aspect of it.”

GOOD AND BETTER

A pattern, in Wendell Berry’s parlance, isa system: a farm, a family, an ecosystem, anindustry, a community, an economy. Solvingfor pattern, then, means finding solutionsthat don’t just fix the problem; they under-stand and work harmoniously with theentire system that contains it, and promotethe well-being of all parts of the system (not

just the part that seems to be a “problem”). “Good solutions,” according to Berry,

solve more than one problem while not cre-ating new ones; they’re of an appropriate andmanageable scale; they’re affordable, resilient,healthful, and beautiful; they’re “good in allrespects.”

That is, to be sure, an unattainable ideal.The patterns in which we operate are socomplex that we can’t possibly understand allthe ramifications of our actions. A solutionthat seems good now may look less so in thelight of new information. DDT was (and inmany parts of the world still is) a life-saverfor millions threatened by malaria-carryingmosquitoes. When it was invented, who wasthinking about waterfowl?

So the goodness of solutions is relative,and evolutionary. As more information isdiscovered, the solutions get better (thoughnot necessarily more complicated, since bet-ter understanding of natural systems often

VOLUME XIV NUMBER 2

GOOD SOLUTIONSThe Art of Solving for Pattern

(continued on next page)

Jen Uncapher

SUMMER 1998

leads to simpler solutions). Solving for pat-tern, then, is really a process of understand-ing how things work. It’s a search for whatthe philosopher Gregory Bateson called“the pattern that connects.”

AQUEOUS SOLUTIONS

You’d be surprised how often “prob-lems,” when solved for pattern, turn out tobe opportunities. Stormwater, for instance.

In urban and suburban settings, waterrunoff is typically regarded as a nuisance—something to be gotten rid of as quickly aspossible through a system of concretedrains and conduits that channel it intothe municipal sewage system. Aside frombeing expensive, this engineering-intensivesolution creates a significant new problem:in big storms, the runoff overloads thetreatment plant, and so the rainwater, nowmixed with sewage, overflows into streams.

This fall, RMI will coordinate a processto help architects, landscape designers, andmunicipal planners devise better ways tomanage runoff in a Pittsburgh watershed.The approach is textbook solving for pat-tern: minimize pavement and impervioussurfaces that compound the runoff prob-lem, and use swales and other naturaldrainage features to handle the rest. Bymimicking nature, the solution eliminatessewage concerns, produces beautiful land-scaping, and costs a lot less to build andmaintain than conventional stormdrainage.

It worked like a charm for VillageHomes, a pioneering green development inDavis, California. As described in RMI’srecent book Green Development, designingnarrower streets and incorporating naturaldrainage techniques saved $200,000—enough to pay for extra parks, walkways,and landscaping. Those amenities in turnkeep the neighborhood cooler than sur-rounding areas in the summertime (reduc-ing the need for air conditioning), foster astrong sense of community, and contributeto substantially higher property values.

“You know you are on the right trackwhen your solution for one problem acci-dentally solves several others,” notes VillageHomes developer Michael Corbett. “You

For years, RMI has been developing“good solutions” (see cover story) and

quietly feeding them to policy-makers,corporate decision-makers, regulators,and the like. This behind-the-sceneswork has been effective, but it rarelymakes the evening news. Most of ourneighbors here in Colorado don’t evenknow what we do.

That’s OK—we’re notrock stars here. Playing therole of the invisible handsuits us just fine.

But there’s something tobe said for speaking also tothe mainstream. Just imag-ine if energy-efficiencybecame as popular as, say,the Budweiser frogs. What ifpeople said “I’d rather be dri-ving a Hypercar” instead of “Yo quieroTaco Bell”? That would add new leverageto our high-level work.

This spring, a strategic planningprocess initiated by our Board identifiedthe need for more focused publicity andmarketing. Serendipitously, two thingshappened this summer to make this ideaa reality.

First, we learned that we’d received atwo-year, $200,000 grant from theEducational Foundation of America topublicize RMI’s climate and corporatesustainability programs and our forth-coming book (coauthored by PaulHawken), Natural Capitalism. And sec-ond, a longtime friend and professionalmarketer, Norm Clasen, decided todevote the rest of his professional life topromoting the kinds of solutions RMIspecializes in.

Since taking the reins as RMI’s firstpublicist/marketer in July, Norm hasbeen applying the same smarts and cre-ativity to moving the Institute into themainstream as he formerly did sellingeverything from ski boots to cigarettes toreal estate.

Norm says his goal is simply to “tellthe story of RMI and what it’s doing.” Itsounds obvious when you hear someonesay it, yet we haven’t been very good attelling our own story for a mass audi-ence.

Norm’s first week at RMI illustratesthe point. To bring himself up to speed,

he asked all the researchers forsimple descriptions of theirprojects, and they dutifullybusied him with stacks oftechnical papers. As his read-ing pile grew, Norm foundhimself no wiser, lamenting,“Can’t anyone just give me asimple, one-paragraph defini-tion of a Hypercar?” Then heasked, “What’s the story ofthe Hypercar? People like to

hear the story behind the facts.”Norm is right: the way to sell difficult

concepts to laypeople is by telling stories,and RMI has some fascinating ones totell. We get so immersed in the details ofour specialist fields that we tend to forgetwhat an amazing group of brilliant,eccentric, creative, and cantankerousminds we’ve assembled here, 7,100 feetup in the Rockies.

With Norm’s guidance, RMI willincreasingly be taking this story to themedia—particularly the broadcast media,whom we’ve never actively courtedbefore. The mission to work at the cut-ting edge of resource efficiency remainsunchanged, but repackaging our findingsin more user-friendly ways, and market-ing our publications and consulting ser-vices more widely can only strengthenthe outcomes.

So expect to see more of RMI in thepopular media. But we promise: no talk-ing chihuahuas.

SUMMER 1998 ROCKY MOUNTAIN INSTITUTE NEWSLETTER

2 VOLUME XIV NUMBER 2

THE VISIBLE HANDBy L. Hunter Lovins, Executive Director

(continued from page 1)

PERSPECTIVES

decide to minimize automobile use to con-serve fossil fuels, for example, and realizethat this will reduce noise, conserve landby minimizing streets and parking, multi-ply opportunities for social contact, beauti-fy the neighborhood, and make it safer forchildren.”

Corbett probably didn’t think of it assuch, but he was solving for pattern.

INDUSTRIAL ECOLOGY

What does solving forpattern look like whenapplied to industry?

Berry’s principles stressthe need to accept limits,to work with what is athand, to be of appropriatescale, and to minimize theneed for inputs. The growing “industrialecology” movement embodies these ideasby (again) mimicking nature: turning thenormally linear process of extraction/man-ufacture/disposal into a closed loop, wherethe waste from one process is reused as thefeedstock for another.

In a freelance consulting project, a trioof RMI staff are advising a certain carpetcompany that’s trying to eliminate the veryconcept of waste. The company has devel-oped a new kind of carpeting that’s 100-percent recyclable—its fibers and backingcan be easily separated, then sent back tothe factory for remanufacturing into newcarpeting. “Waste” is turned into “food” (asgreen architect Bill McDonough wouldsay), reducing both disposal and raw-mate-rials costs. Moreover, the manufacturingprocess is entirely solar-powered, decou-pling energy as well as materials use fromthe “lithosphere” (the earth’s crust).

The new product (code name:“Amory”) is to be launched this fall. Thecompany expects to make a fortune fromit. That’s a pretty good solution, in largepart because it works with the prevailingeconomic “pattern.”

Likewise, the recognition that green-house gases are a costly form of industrialwaste—and that reducing or reusing themis profitable—is inspiring good solutions ina number of sectors (see page 4).

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VOLUME XIV NUMBER 2 3

But natural systems do more than elimi-nate waste: they bring seemingly disparateforces together. The industrial ecology vil-lage in Kalundborg, Denmark, for example(“Durable Enterprise,” fall/winter 1997),creates unlikely bedfellows, linking fishfarms with pharmaceutical plants, wall-board makers with power generators.

As the biologist Lewis Thomas wrote,“There is a tendency for living things to

join up, establish linkages, live inside eachother, return to earlier arrangements, getalong wherever possible. This is the way ofthe world.” These linkages and arrange-ments are the patterns that good solutionssolve for.

TRANSIT PATTERNS

In a way, all solutions, however short-sighted, solve for some pattern. But whichis the right pattern? Patterns—systems—exist at all levels; they’re nested one insideanother. Everything, as they say, is connect-ed. You’ve got to know where to draw theline, otherwise you’ll get bogged down andnever solve anything.

For example, RMI’s Hypercar conceptsolves or reduces some problems (oil deple-tion, smog, greenhouse-gas emissions) butmay make others (congestion, road-build-ing) worse. It’s the application of a techno-logical solution (a better type of car) towhat is inherently a social problem (peopletrying to get around), and since the solu-tion is mismatched to the problem, it isn’tas good as it could be.

Yet RMI also has to match its solutionsto its own resources. Transforming the $1-trillion global automotive industry isenough of a challenge; changing the waypeople choose to get around is more thanthe Institute can take on, at least for thetime being.

Fortunately, others are working differentangles. Perhaps the best example of solvingtransit problems for pattern comes fromCuritiba, Brazil. The city has created axialdevelopment layout, dedicated bus ave-nues, and bus “boarding pods” that pro-vide all the advantages of a subway systemat a tiny fraction of the capital cost. Thattranslates into greater convenience andlower fares. Result: buses provide three-

fourths of the city’s totaltransportation, helping tocut per-capita energy useby 30 percent. Because itpaid attention to the needfor access and mobility,not for driving cars,Curitiba has the highestcar ownership—and thelowest car drivership—in

Brazil.

ZEN AND THE ART OF PROBLEM-SOLVING

There’s a kind of Zen to solving for pat-tern. If you design a new product, for in-stance, you’re introducing a new thing intoa very complicated existing pattern. Does itfit? What will be its effects? To design aboat, you must understand the lake.

As Christopher Alexander counsels inhis book, A Pattern Language: “When youbuild a thing, you cannot merely build thatthing in isolation, but must also repair theworld around it, and within it, so that thelarge world at that one place becomes morecoherent, and more whole; and the thingwhich you make takes its place in the webof nature, as you make it.”

Searching for connections, seeing thehidden pattern—understanding the entiresystem, and the systems it contains and thesystems that contain it—these are hardtasks that take designers and policymakersoutside the realm of familiar formulas. Butthis is what we must do if we’re to begintreating causes instead of symptoms, andtruly solving our problems instead of shift-ing and compounding them.

—DAVE REED

Drainage swales at Village Homes.

Jen Uncapher

SUMMER 1998 ROCKY MOUNTAIN INSTITUTE NEWSLETTER

4 VOLUME XIV NUMBER 2

credits for the carbon dioxide it hadsequestered underground. Get paid twicefor carbon-dioxide reduction and suddenlyit doesn’t seem like such a ball and chain.Norsk Hydro recently announced such aplan.

ECONOMIC SELF-INTEREST

Once considered the domain of do-gooders, climate protection is now becom-ing part of corporations’ fiduciary responsi-bility. Fortune magazine recently reportedhow many firms are cutting emissions,almost unintentionally, by focusing on sav-ings. An 11 May article, “Turn Down theEnergy, Turn Up the Profits,” quoted anenergy manager at a DuPont facility thathas cut energy use by a third: “Who knows

what will happen to energy pricessix months from now? Whateverhappens, improving the way weuse energy reduces our cost in thelong run.”

In the semiconductor world,one major company RMI is advis-ing is considering close to factor-

50 reductions in carbon-dioxide emissionsper chip by as early as 2008. (Such reduc-tions look feasible and profitable, though itmight be tough to get it all done so soon.)In an industry where saving one watt addsabout $10 of present value to the bottomline, carbon reduction is a natural byprod-uct of economic self-interest.

Insurance companies have emerged assome of the most vocal evangelists for cli-mate protection—not surprising, consider-ing how much they stand to lose from agreenhouse-induced rise in extreme weath-er events (“Risky Business,” spring 1996).In a recent Atlantic Monthly article, RossGelbspan pointed out that annual insur-ance losses due to storms in the 1980s were$2 billion. In the 1990s they were $12 bil-lion. Is the increase largely a result of globalwarming? Responsible scientists won’t yetassert causality—but insurance companiescan’t afford not to hedge their bets.

ADDING CREDIBILITY

As the industrial giant stirs, nonprofitand government initiatives are under wayas well. This spring, the Pew Charitable

Last year, to reduce greenhouse-gasemissions, DuPont installed a convert-

er on the smokestack of one of its plantsthat makes adipic acid (the key precursorof nylon). By transforming nitrous oxide tonitrogen and oxygen—components ofair—that one retrofit reduced climate-alter-ing emissions by as much as taking 3 mil-lion cars off the road.

Clever, but not clever enough.Why? It didn’t make money.

Now, DuPont’s competitorSolutia has developed a processto use “waste” nitrous oxide toconvert benzene profitably intophenol, a common commoditychemical. Bingo! Such lemons-to-lemonade stories illustrate what RockyMountain Institute has been saying allalong: climate protection need not be cost-ly, and can usually be profitable.

The journey to profitable climate pro-tection typically has three stages. First,business realizes it’s affecting climate. Next,pioneering companies spend money toaddress the problem. Finally, the smartones learn how to make money from it.Paradigm shifted.

RMI is currently engaged in high-levelprivate discussions on climate strategy withseveral leading firms in the oil, chemical,automotive, and semiconductor industries.Each client has found scores of opportuni-ties for profitable climate protection, manyof which are already being implemented.

FOSSIL-FUEL ENDGAME

An increasing number of companies aregetting wise to the possibilities, and the car-bon-trading framework established by theKyoto protocol (“After Kyoto,” spring1998) promises to accelerate this trend.

In the energy sector, major players arerealizing that the fossil-fuel endgame has

arrived as a result of competitive pressure,climate issues, or both. This implies rapiddiversification into energy efficiency,renewables, and hydrogen. For example:

• British Petroleum and Shell are build-ing solar businesses—a sensible move, con-sidering the market for photovoltaics isprojected to grow at an annual rate of15–30 percent indefinitely.

• Enron Corp.—one of the world’sbiggest natural-gas companies—is movingaggressively into renewable power, which itviews as increasingly competitive. It hasinstalled more than 3,200 wind turbines,and with Amoco has created a joint-ven-ture partnership that is now the world’s sec-ond-largest solar-cell manufacturer.

Developments like these are probablyonly precursors of bigger things to come.Consider, for example, just one opportuni-ty presented by the emerging market inhydrogen fuel cells for buildings and vehi-cles (“Fuel for Thought,” summer 1997).

Natural gas can be chemically processedinto hydrogen. As demand for hydrogenincreases, it will make sense to do the con-version at the wellhead and then ship thehydrogen via existing natural-gas pipelines.Carbon dioxide produced in the conver-sion, suggests Princeton physicist BobWilliams, could then be reinjected into thewell, a process that about pays for itself inmethane recovery. (Pressurizing the fieldforces out more methane—a techniquelong used in oilfields.) Then, under theKyoto protocol, the gas company could sell

CLIMATE

CLIMATE PROTECTION HAPPENSHow Smart Companies are Turning Lemons into Lemonade

One major semiconductor company isconsidering close to factor-50 reductionsin carbon-dioxide emissions per chip by

as early as 2008.

Trusts gave $5 million to found the PewCenter on Climate Change, a policy groupdesigned to add credibility to the climate-protection movement. Run by EileenClaussen, the former Deputy AssistantSecretary of State for EnvironmentalAffairs, the center is endorsed by a consor-tium of solution-oriented corporations.

In May, the Pew Center took out a full-page ad in The Washington Post featuring astatement titled “What Do We All AgreeOn? Answer: Taking on the Challenge ofGlobal Climate Change” and signed bysuch corporate Goliaths as Boeing, Lock-heed Martin, Toyota, United Technologies,and 3M. (This highly successful campaigneclipsed a similar but moremodest RMI-brokeredstatement described in theprevious newsletter, whichis likely to be reactivatedthis fall.)

Two other major projectsare the World ResourcesInstitute’s Climate Pro-tection Initiative and theU.S. DOE/EPA-sponsoredClimate Wise program.Both partner with business-es to identify profitableemissions-reduction strate-gies with an eye towardmeeting the Kyoto proto-col’s goals and building acorporate constituency forthis new source of profit.(The more firms behave asif the protocol were already ratified, themore likely—and less necessary—ratifica-tion becomes.) Climate Wise is helping tolead the way: with more than 300 partners,including heavyweights like Weyerhauser,AT&T, and Johnson & Johnson, it influ-ences over 7 percent of U.S. industrialenergy use.

Bottom line: a revolution is occurringacross a fairly large range of industry. Aswith any revolution, there’s a split betweenthose that “get it” and those that don’t. Inthis case, early adopters will derive decisivecompetitive advantage. Those that daw-dle—let’s just say we’re not buying theirstock. —AUDEN SCHENDLER

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VOLUME XIV NUMBER 2 5

TRANSPORTATION

SEEING THE (ULTRA)LIGHTA 10-Step Program to Complete the Leap to Hypercars™

The previous newsletter described howthe auto industry may be “halfway to

Hypercars.” Automakers are now exploringhybrid-electric drivesystems for their nextgeneration of vehicles, but they’re missingthe other half of the picture: ultralight,ultra-low-drag design.

How to get them to make the wholeleap? One way is to light a fire under thefolks who stand to gain most from a shiftto ultralight materials: the makers ofadvanced composites.

RMI’s Michael Brylawski and AmoryLovins did just that in a paper delivered to amajor advanced-materials conference inJune. Their message: get going, folks, or steeland aluminum are going to eat your lunch.

MOVE IT OR LOSE IT

Advanced-composite materials are wide-ly used in sporting goods and spacecraft,but rarely in cars. They’re perceived asexpensive and exotic, and historically when

automakers have used them, they’ve doneso in a piecemeal fashion—say, adding acomposite fender to a mostly steel body—which tends to produce compatibility prob-lems with the surrounding metal parts.

Yet RMI’s research indicates that ad-vanced composites offer the greatest poten-tial for building automobiles that aren’t justultralight, but also ultrasafe, rugged, luxuri-ous, and recyclable.

To inspire an ultralight automotive revo-lution, Brylawski and Lovins advise theadvanced-composites industry to get awayfrom trying to make car parts that mimicmetal ones. Instead, they urge, emulate themetals industries, which are rapidly develop-ing techniques for lightweight automobiles.

The aluminum industry has been aggres-sive in partnering with automakers. Forexample, Alcoa teamed up with Audi tocreate the luxury A8, which boasts 40 per-cent less mass and one-third fewer partsthan conventional autobodies. In 1996,Alcoa’s chairman pledged $1 billion to anyautomaker willing to produce a high-vol-ume aluminum vehicle. Thanks in part tosuch efforts, the use of aluminum in auto-mobiles has nearly doubled since 1978.

Steel has fought back. In 1995, morethan 30 steel companies got together andhired Porsche Engineering to build anexperimental five-seat “UltraLight SteelAutobody” (ULSAB) that’s 25 percentlighter, five times stiffer, and $150 cheaperto build than conventional autobodies.Rather than optimizing individual parts orexisting designs, Porsche designed an entire-ly new autobody from the ground up.

And what of the composites industry?Nada, zip.

Like so much of RMI’s recent Hypercarwork, Brylawski and Lovins’s paper speaksas much of business opportunities—and the

(continued on next page)

Hypercars have hit the Information Superhighway—check outwww.hypercar.com to find out everything you ever wanted toknow about Hypercars (and more)!

Hypercars on the Web

Percepticon

SUMMER 1998 ROCKY MOUNTAIN INSTITUTE NEWSLETTER

6 VOLUME XIV NUMBER 2

risks of inaction—as of technical feasibility.Show the car companies you can makeadvanced-composite autobodies and you’llcreate a vast, lucrative new market for yourindustry. Don’t, and watch your alreadysmall market share shrink. (That’s right,shrink: Ford’s 40-percent-lighter P2000experimental vehicle, supported by threealuminum companies but no compositefirms, contains fewer pounds of polymersthan a 1997 Taurus.)

HOW TO DO IT

To ensure the composites industry’sfuture, the paper advocates adopting sevenstrategies used by the metals industry:

1. Build a car—then show it off.2. Take a whole-systems approach.

Focus not on making materials metals-compatible, but on the advantages ofwhole-car applications.

3. Integrate. No inventions neededhere: carefully combining proven technolo-gy should do the trick, as ULSAB showed.

4. Partner with automakers. Don’tleave your customers out of the loop—theyneed to be enthusiastic adopters of yourproduct. Just ask Audi.

5. Collaborate. If 30-plus highly com-petitive steel companies can put their dif-ferences aside to advance their collectiveinterest, so can you.

6. Be ambitious. Even if you can’t offera billion-dollar carrot, make no little plans.

7. Act now. Steel and aluminum havehead starts. Catch up, before automakerstool up to non-composite materials.

In addition, the industry can blaze anew trail in three respects:

8. Foster up-and-coming automakers.A variety of high-tech firms have most ofthe skills needed to make Hypercars, withfew of the traditional automakers’ inhibi-tions about new materials. Court them.

9. Seek synergies. Composites fit ideal-ly with hybrid-electric propulsion. Workon capturing the design synergies withhybrid systems and components in waysmetals can’t.

10. Rewrite the rules of competition.Don’t just compete—set new standards.One composite part for the new Lotus

Editor’s note: With Hypercars now so closeto becoming reality, it has become an unfor-tunate legal necessity to protect RMI’s intellec-tual property by trademarking and capitaliz-ing the word “Hypercar.” (A generic equiva-lent is “ultralight hybrid car.”) Similarly,RMI has applied to protect “The HypercarCenter” as a service mark (SM).

(continued from previous page)

What if the composites industry does-n’t answer the challenge? Will there stillbe Hypercars? Probably. It’s possible toforesee, say, an aluminum-intensiveHypercar. The P2000, for example, has abody structure 55 percent lighter than anequivalent steel vehicle. This is well with-in the mass-reduction targets RMI’sHypercar Center has used in its computermodeling. Thus, it seems, aluminumcould get automakers “all the way” toHypercars.

But mass reduction is only one part ofthe picture. Safety, durability, ride com-fort (a function of stiffness and acousticalperformance), and recyclability also areimportant factors for success. Advancedcomposites perform better in all of theseareas. For example, they can absorb three

times as much energy per pound as alu-minum, and crush more smoothly. Withincreasingly heavy SUVs filling up theroads, which material would you ratherhave your ultralight car made of?

Composites also capture other strategicadvantages, such as “lean” manufacturing,fast product cycles, lay-in-the-mold color(which eliminates the paintshop), andlow-cost tooling.

While the metals industries’ recentefforts at cutting weight might makemetal Hypercars possible, any car builtout of metal would, ultimately, be a com-promise. Advanced composites aloneoffer the complete package of benefitsneeded to make Hypercars superior toother vehicles on the road.

—MICHAEL BRYLAWSKI

Why Composites Matter

Elise serves six different functions, includ-ing absorbing all the energy of a 30-mphcrash into a fixed barrier.

Of course, none of this will be easy. Butit may be necessary for the industry’s long-term survival—not to mention the successof the Hypercar revolution.

—CAM BURNS & MICHAEL BRYLAWSKI

GREEN DEVELOPMENT

READ THE MANUALA Simple Idea for Keeping Green Buildings Green

When you buy a $40 toaster oven, itcomes with a 30-page owner’s man-

ual. Buy a $10-million office building andyou get diddly. While there may be a bookfor the facility manager, the individualoccupants get no explanation or instruc-tions.

You can imagine the sort of foul-ups thatcan produce even in conventional build-ings—overloaded circuits, stuck air vents,and the like. But ignorance is arguably even

worse in green buildings, whose high per-formance depends on the correct operationof finely tuned systems.

That’s why RMI’s Green DevelopmentServices (GDS) and its partners are writing“occupant’s manuals” for a number ofbuildings they’re designing or retrofittingfor Monsanto on the biotech giant’s St.Louis corporate campus. Each manual willdescribe the building’s design philosophy,identify the materials and components

But Kane was also on the front line in awar raging nationally over the appropriate-ness of logging on public lands. Local envi-ronmentalists had successfully blocked amajor timber sale on the Allegheny Na-tional Forest; the timber industry respond-ed by turning up the heat on the ForestService. Forest activists felt intimidated.Both sides were circling their wagons.

And along came RMI saying, Let’s all befriends.

One Kane-area activist, Bill Belitskus,accused RMI of being duped by timberinterests into giving its “green stamp ofapproval” to an economic-developmentplan that would (he believed) inevitablyendorse more logging. His accusation, cir-culated by email to many environmentalorganizations and foundations, causedquite a stir in cyberspace, although few

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VOLUME XIV NUMBER 2 7

ECONOMIC RENEWAL

THE KANE MUTINYA Timber Town Tests the Limits of Collaboration

used, explain how things work, andgive tips on how to optimize employ-ees’ individual spaces for comfort andefficiency.

GDS’s relationship with Monsantobegan in 1996, when RMI helpedlead the company in a process todecide how to upgrade its office build-ings and chemical plants. Out of thatprocess emerged a five-year plan torenovate 1.5 million square feet ofoffices on the St. Louis campusaccording to sustainable design princi-ples. Monsanto retained GDS toensure that its various specialist con-tractors capture all the green opportu-nities possible.

The first project, completed lastNovember, was the conversion of one floorof a classically inefficient older buildinginto sleek and comfortable executiveoffices. The so-called A3 renovation hasreceived rave reviews for its use of daylight-ing and the control occupants are givenover their immediate environments. It’sintended to serve as a model for all futureprojects, setting the standards for indoor airquality, daylighting, materials use, energyperformance, and sustainable sourcing.

Of projects currently in the works, per-haps the most exciting is the MonsantoIncubator Facility, a new building that willprovide leased space to scientists and entre-preneurs from outside the company. NewGDS staffer Alexis Karolides has beengiven a mandate to push the green enve-lope with an integrated package of tech-niques that will cut energy use in half—aremarkable reduction for a laboratory facili-ty, which must meet strict (and energy-intensive) air-handling requirements.

Innovative air handling, along with bio-logical waste treatment and other resource-saving design concepts, are expected toearn the project one of the first platinumawards in the Leadership in Energy-Efficient Design rating system justannounced by the U.S. Green BuildingCouncil (of which RMI is a member).

Other upcoming projects include therenovation of a large warehouse into ahigh-tech lab and computing center forgenetic sequencing, and the construction of

a new plant sciences institute. GDS is alsohelping Monsanto evaluate concepts foroverhauling the entire campus electricityinfrastructure to make it more efficient.

One of the cornerstones of RMI’sEconomic Renewal process is collabo-

ration. Collaboration—in the sense ofworking together to achieve commongoals, not conspiring with the enemy—isone of those manifestly Good Things, likemotherhood and apple pie. What’s not tolike? But ER staff recently found there’sanother side to that coin.

RMI was doing fieldwork in Kane,Pennsylvania in March as part of a largerproject to tailor Economic Renewal fortimber-based local economies (“Falling Offa Log,” spring 1998). Kane was an excel-lent candidate for a collaborative econom-ic-development process: heavily reliant onincome from the surrounding AlleghenyNational Forest, it was polarized betweenthose favoring continued resource extrac-tion and those seeking new economic alter-natives. (continued on next page)

UPDATES

• The redevelopment plan forHighlands Gardens Village, in whichGreen Development Services assistedwith initial visioning, received unani-mous approval from the Denver CityCouncil in May amid overwhelminglypositive public comment. The mixed-use, intergenerational project’s relative-ly painless review illustrated one of thetangible benefits of green planning andcitizen involvement.

• GDS has begun work on a secondedition of its acclaimed Green Develop-ments CD-ROM. The new edition isexpected to feature 200 case studies—twice as many as the current disk. Ifyou’d like to nominate a green devel-

opment for inclusion, please email JenUncapher at jenu@rmi.org.

—DAVE REED

Bill Browning

Monsanto A3: note the use of clear office dividers to allowdaylight to reach farther into the building.

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8 VOLUME XIV NUMBER 2

folks in Kane were aware of it.Now, several months later, process

results speak for themselves. Actions pro-posed by the Kane Area Renewal Effortemphasize economic diversification as away to reduce timber dependence. Theyinclude tourism promotion, a new com-munity center, a new post-secondaryvotech school, enhancement of the down-town area, and the creation of a pre-schoolenvironmental program.

Yet some of Bill Belitskus’s underlyingconcerns were valid, and remain so.Collaboration is a contentious concept inforest circles these days. A local group inQuincy, California used a collaborativeapproach to rewrite the management plansfor parts of three national forests, and lastyear sought to have Congress make thoserevisions law. National environmentalgroups have denounced the Quincyprocess as setting a dangerous precedent.This sort of collaboration, they warn,allows logging companies to circumventnational regulations, win greater conces-sions from (presumably) less savvy com-munity representatives, and then “green-wash” the result by calling it the will of thepeople. Quincy participants counter thattheir process achieved a realistic balance oflocal stakeholder interests.

Whatever the merits or otherwise of theQuincy process, that’s not what EconomicRenewal is about. Its purpose is to facilitatecollaborative solutions to economic devel-opment, not forest management. In thecase of timber communities, that meansstrengthening the local economy regardlessof how the surrounding forest is managed.

Still, the Kane controversy has rein-forced our understanding that collabora-tion doesn’t work so well when one partyhas (or is perceived to have) disproportion-ate power; and even when it produces asolution that all the participants are com-fortable with, non-participants might stillraise a stink. The episode suggested newwording in the recently reprinted EconomicRenewal Guide, and will provide grist forRMI’s forthcoming book, Beyond TimberDependency.

—DAVE REED

Why does the Windstar land need tobe managed—surely it can take care ofitself without help from its humanfriends?

—Malcolm Wells, Brewster, Mass.

I would agree with you, Malcolm,except for one fundamental thing: we

humans have altered this particular land-scape too much for it to re-cover naturally from distur-bance.

Before I elaborate on that,though, I’d like to brieflyexplain why this question is areally important one, andwhat it has to do with RMI’soverall mission.

Land is a precious naturalresource. There was a timewhen we could squander it—as we squandered other resources likeenergy, water, and timber—but there aretoo many of us now. As the human pop-ulation increases, we have to make betteruse of each unit of resource, includingeach acre of land. In order to coexist withnature, we’ll need to apply just as muchingenuity to creating efficient land use asto creating, say, efficient cars or buildings.

Much of the land in our country isnot being “used,” and I for one hope itnever will be. I want my kids and grand-kids to be able to enjoy wilderness just asI have. One of the keys to preservingwild lands is using the other lands moreefficiently.

Now let’s consider the situation atWindstar. It was ranched for about 100years, then basically allowed to rest forthe past 20. Has that rest enabled it toreturn to its original state? Hardly. It’snow overrun by invasive plant species(weeds), and erosion and loss of wetlandshas if anything increased. And givenmore rest, I believe, the situation wouldonly get worse. Here’s why.

A healthy ecosystem will recover from

disturbance through a natural processcalled succession, where one communityof species gives way to the next until aclimax community is achieved. This isnot happening at Windstar because theprocesses that drive succession have beenpermanently altered.

Humans have removed natural preda-tors (wolves), introduced non-native

plant species, suppressed fire,cleared and drained bottom-lands for agriculture, and,more recently, fragmented thesurrounding land with realestate development.

Development has elimi-nated all but a few areas ofwinter range in the valleybottoms, so the large herbi-vores—elk and mule deer—concentrate in these refuges,

putting unsustainable pressure on them.Windstar is one such refuge. Addition-ally, because the herds are no longerchased by predators, they don’t run andchurn up the soil as much. Native grass-es, which coevolved with the herbivores,depend on that churning to prepare thesoil for seeding. Similarly, periodic firepromotes natural succession.

To return Windstar to its originalstate, we must restore—or at least repli-cate—the ecological and biologicalprocesses that created it. Thus the Wind-star Land Conservancy has reintroducedfire (we had a small prescribed burn thisspring) and will begin a small-scale hunt-ing program this fall, allowing about 10elk to be taken each year. These are long-term strategies aimed at treating causes,not symptoms. In the short term it’s alsonecessary to redress some of the symp-toms of past mismanagement by restor-ing wetlands, controlling erosion, anderadicating invader species.

In closing, I’d like to add something tomy earlier point about land being a pre-

A LITTLE HELP FROM ITS FRIENDSBy Mike Villa, Windstar Land Manager

DEAR ROCKY

(continued from previous page)

(continued on next page)

ROCKY MOUNTAIN INSTITUTE NEWSLETTER SUMMER 1998

VOLUME XIV NUMBER 2 9

RMI NEWS

CORPORATE SUSTAINABILITY

TAKING IT TO THE BANKThe World Bank, That Is

Count on the semiconductor industryfor a time crunch. Not two weeks

after RMI staff and colleagues completedan efficiency assessment of three Europeanfacilities for STMicroelectronics (“And forOur Next Trick…,” spring 1998), the chipmanufacturer wanted them back for anoth-er series of visits.

So RMI team members Amory Lovins,Chris Lotspeich, and Auden Schendler,along with fellow consultants fromSupersymmetry and Chris Robertson &Associates, packed their bags and dove backinto the world of chillers and cleanrooms.Then, in late June, with the first 100-plus-page report on efficiency opportunities fin-ished and the second nearly done, theywere off to an American plant for more ofthe same. To date, the team has assessed ahalf-dozen sites in Europe, North America,

and Asia. RMI is also discussing a varietyof related issues with senior management atST, including greenhouse-gas reductionand energy efficiency.

The ST work is one of two major pro-jects in the pipeline for RMI’s new Corp-orate Sustainability consulting arm. Theother is an environmental assessment ofinternal operations at the World Bank’sWashington headquarters. In June, RMI’steam, which included colleague Gil Friend,looked at procurement, energy and wateruse, transportation issues, waste manage-ment, communications, and ergonomics.

The visit coincided with the Bank’s firstcelebration of World Environment Day—atwo-day educational bazaar in the Bank’smain complex, where RMI hosted a booth.There, Bank President James Wolfensohntold RMI team members: “Find problems.

Beat up on us. If we’re meeting a givenenvironmental standard, set the standardhigher.” Clearly a mandate from the top.

Though the project is limited in scopeand time, RMI and the Bank hope thereport will spark major environmentalchange in an organization that is becomingincreasingly proactive. The World Bankemploys roughly 8,500 people and dis-bursed close to $20 billion in 1997—highleverage indeed. —AUDEN SCHENDLER

cious resource. Obviously there are toomany humans causing too muchimpact on the environment; I’m sureyou understand that reducing thoseimpacts is what RMI is all about.

But that said, it would be a mistaketo think that humans are separate fromthe environment and to despise our-selves for our impacts. We are part ofthe web of life—an unbalanced part,to be sure, but still a part. I feel thatthe notion of letting nature run itscourse in ecosystems shared by us failsin some way to acknowledge our beinga part of nature. We will inevitablychange the ecosystems we inhabit.Maintaining them—or better yet,restoring them—is our highest calling.

A LITTLE HELP(continued from previous page)

Auden Schendler

In the World Bank boiler room: (from left)RMI’s Chris Lotspeich, World Bank operationsand maintenance chief Carlos Reyes, fellow con-sultant Gil Friend, and RMItes Alexis Karolidesand Bill Browning.

overhead slides from a presentation to theAspen Institute. 12 pages, $4.00 plus ship-ping & handling.

Please note that our supply of freeGreen Developments CD-ROMs is nowgone. The CD may still be purchased for$7 plus shipping and handling.

Those of you who donated more than$100 to RMI, please note: we are unfortu-nately unable to extend the customarydonor publication discount to the booksFactor Four and Green Development.

THANKS, BOOGIEHearty thanks to Leonard (“Boogie”)

and Pepper Weinglass of Woody Creek,Colorado, for their donation of gymequipment for RMI’s staff housing.

ANNUAL REPORTRMI’s 1997 annual report is now avail-

able. It highlights the Institute’s work in1997, profiles staff members, describes thespecial niche RMI fills in the nonprofitworld, and summarizes its finances. If youwould like a free copy, please contact JudyMoffatt in Development.

PUBLICATIONS NEWSThe following new publications may be

ordered from RMI:• “Advanced Composites: The Car is

at the Crossroads” (T98-1). See page 5.14 pages, $5.00 plus shipping & handling.

• “Putting Central Power Plants outof Business” (E98-2). Paper printouts of

New Staff

SUMMER 1998 ROCKY MOUNTAIN INSTITUTE NEWSLETTER

10 VOLUME XIV NUMBER 2

Total Accrued Expenditures: $2,532,753

Total Accrued Expenditures: $2,532,753

Total Accrued Revenue: $2,948,664

EXPENDITURES BY CATEGORY

SOURCES OF REVENUE

EXPENDITURES BY PROGRAM

Publication Revenues

Interest & Dividends

E SOURCE Income

Restricted Foundation Grants

Unrestricted Foundation Grants

Consulting Fees

Corporate Contributions

IndividualContributions

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Payroll, Taxes,& Benefits

Printing & Publishing

Travel, Conferences, & Research MaterialsDepreciation

Interest (56% passthrough)

Legal, Accounting & Insurance

OtherOperationalExpenses

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Water Green DevelopmentServicesTransportation

General

Fundraising

Corporate Sustainability& Climate Change

EnergyEconomic Renewal

Other

Systems Group on Forests

Communications

In-KindContributions

GovernmentGrants

1997 FINANCIAL RECAPAnother Financially Sound Year for RMI

Rocky Mountain Institute achieved a$485,000 operating surplus in 1997,

the largest in its history. It was RMI’s tenthoperating surplus in 16 years, and its thirdin a row.

Here are audited key financial indicatorscompared with 1996:

• Operating net income was $416,000,exceeding the target by $123,000, or 38percent.

• Operating expenses—65 percent forpeople—rose by only 2.7 percent, from$2.47 million in 1996 to $2.53 million in1997. Fundraising accounted for 6.7 per-cent of RMI’s total expenses, or 5.8 percentof total revenues.

• Total accrued revenues rose by 7.1 per-cent to $2.95 million, surpassing increasesin expenses by $131,000.

• Foundation grants provided 49 per-cent of revenue in 1997, up from 39 per-cent compared with 1996, due to two one-time $300,000 grants accrued in 1997.Excluding the effect of a $325,000 gifttrust accrued in 1996, individual contribu-tions increased 27 percent, or $66,000.

• Earned income decreased by$124,000, mainly due to reduced revenuefrom consulting and the Systems Groupon Forests. Earned income (including thelatter) fell from 39 percent to 33 percent ofrevenue.

• Total assets rose from $4.66 million to$5.06 million; net worth, from $1.08 mil-lion to $1.57 million.

RMI purchased a staff house in 1997,financed mainly by a bank loan that in-creased facilities debt by nearly $400,000.RMI is currently seeking lower-interestloans to replace this debt.

Meeting daily expenses of about $7,760remains a challenge, particularly during thenormal summer cash drought. A CashflowStabilization Fund established in 1994 bythe Joyce Mertz-Gilmore Foundation hadprovided a welcome safety net, but expiredin mid-1998. RMI is seeking loans or giftsto replace its collateral. The Institute bor-rows only for capital purposes, not foroperations, and finances these facilitiesimprovements through private notesarranged with its supporters.

Back row (left to right):summer groundskeeper JeánHarp, intern Zack Merritt,volunteer Nick Weil, publi-cist/marketer Norm Clasen,intern Chris Trevisani.Front row: intern IonaHawken, groundskeeperHeather Kelly (seated),intern Ingrid Råde, GDSspecialist Alexis Karolides,intern Monica Hauk. Notpictured: Marty Hagen,Judy Moffatt. Thanks andfarewell to departed staffersScott Chaplin, Lee Novak,and Amy Seif.

Dan LeBlanc

Thanks

BENEFACTORS$10,000 AND OVER

The Geraldine R. DodgeFoundation

The Energy FoundationMary and John Frantz, in mem-

ory of Margaret FrantzGap FoundationVira I. Heinz EndowmentsHeinz EndowmentsWilliam and Flora Hewlett

Foundation

PATRONS$1,000-$9,999

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KlostermanSusan Krivin and David

OhanesianLawrence LadinValerie and Patrick LallyNell F. LePlaJohn P. LindermanJohn J. MaxwellLee Scott Melly

Stephen D. MillerAvis Ogilvy Moore, in memory

of Stewart OgilvyMr. & Mrs. Kenneth F.

Mountcastle Jr.Johnny M. Mullen, in memory

of Benjamin M. MullenNashville Community

Foundation, Shirley Caldwell-Patterson

Chris D. QuartettiGeorge RogersNancy RumbelFrank RussellThe San Francisco Foundation,

Jacqueline M. FarleyMarnie C. SchaettiGeorge L. SchloemerRandy K.R. SchmidtJulie SlagelJean Spicer SmithDouglas J. SmithMerrill E. SomaryEtel and Tommy Thomas (2)Darla M. Tupper, in honor of

Charles JaffeeDr. John C. TwomblyUnited Technologies Carrier

Corporation, Rick FedrizziWaste ManagementJon Wellinghoff(2)Margaret and William E.

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John Accardi and Nancy ClarkeTom AdamsDavid AndriThomas John BarryMark A. and Caroline Blair

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Hoskyns-AbrahamBrian J. Burroughs, in memory

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Timothy McNerneyTimothy F. MerkerElizabeth and James MijanovichPeter MillerStephen D. MillerMurray MilneJames NourseOdigha OdighaOntario Associates of ArchitectsKradan and Kent OstbyMargaret and David H. PenoyerPaul PerryJean Booth PierettiKathryn Ann PrestonFrances and Albert RaboffDiana RaiderRonald R. ReussWilliam James RobinsonPaula and Jim RogersKathy RussellDouglas SamsClaire SchosserRobert SculthorpeJoan ShoemakerMarcia ShullLarry SiegelSheldon SkalfieldJay L. SkilesBarbara and Marc SlovakDanny P. SmithGail and Greg C. SpeerVicki and Donald G. StevensonRev. Dr. Tay Tanya and Stanley

WhitesideToni ThayerRobert TojiDarla M. Tupper and Anna TysonDaniel N. VellingDan VetterMartin WeissLois and Darrell G. WellsBarbara WhiteKeya WhiteDr. Ellie Whitney-YaegerTodd A. WildermuthJoanne J. WilliamsJohn W. WinchesterLynn T. and Joan Lee WinterDavid WristenErika WudtkeRuth and Charles Young, in

memory or Carl Herbine

ROCKY MOUNTAIN INSTITUTE NEWSLETTER SUMMER 1998

VOLUME XIV NUMBER 2 11

INSTITUTE SUPPORTERSOur sincere appreciation is offered to these friends who have contributed to RMI.

Please let us know if your name has been omitted or misspelled so it can be corrected in the next issue.Donations received between 1 January and 30 April 1998 are listed.

Numbers in parentheses indicate multiple donations.

GENERAL SUPPORT DONATIONS

The NewsletterThe Rocky Mountain Institute

Newsletter is published three times a yearand distributed to more than 22,000readers in the U.S. and throughout theworld.

Please ask us before reproducing, withattribution, material from the Newsletter.

Although space constraints prevent usfrom printing letters to the editor, wewant to hear your comments, criticism,or praise relating to any article printed inthe Newsletter. Please address all corre-spondence to:

Newsletter EditorRocky Mountain Institute

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(970) 927-3851 / fax (970) 927-3420Email: dreed@rmi.org

Web: http://www.rmi.org

EDITOR .......................................Dave ReedLAYOUT...................................Ema Tibbetts

About the InstituteRocky Mountain Institute is an inde-

pendent, nonpartisan, nonprofit researchand educational foundation with a visionacross boundaries.

Seeking ideas that transcend ideology,and harnessing the problem-solving powerof free-market economics, our goal is tofoster the efficient and sustainable use ofresources as a path to global security.

Rocky Mountain Institute believes thatpeople can solve complex problemsthrough collective action and their owncommon sense, and that understandinginterconnections between resource issuescan often solve many problems at once.

Founded in 1982, Rocky MountainInstitute is a §501(c)(3) /509(a)(1) publiccharity (tax-exempt #74-2244146). It hasa staff of approximately 45 full-time, 48total. The Institute focuses its work inseveral main areas—corporate practices,community economic development, ener-gy, real-estate development, security, trans-portation, and water—and carries oninternational outreach and technical-exchange programs. Its E SOURCE sub-sidiary (4755 Walnut St., Boulder, CO80301, 1-800-E SOURCE, esource@esource.com, www.esource.com) is theleading source of information on advancedtechniques for electric efficiency.

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Bailey IzardBev & Bob RittmeyerJanice Rodgers & Thom SchliemTom & Lois SandoRoger SchultzSergei Smirnoff, Jr.Teresa SpitzenbergerP.M. Standley Corp., in honor of

Rhea Justice StandleyFred WeedThe William B. Wiener, Jr.

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Son Inc., in honor of Harold A.Schowalter

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Esq.Kim & Marshall EvansAnna FerraraJoyce & Paul GudatJean Harrington & Allan BeekLinda & Todd HerrickConstance & Thomas HodsonKatherine HoustonVicky HuerthTom IckesPatty Helene JohnstonMarco KaltofenLana & Sander Karp

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PetersAgi & Henry PlenkRobert ReedWilliam RobinsonLane & Deborah Schiller

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SECURING THE FUTURE CAMPAIGN

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Donations in Memory of John DenverPATRONS

$1,000-$2,499

James H. Woods Foundation

SPONSORS$500-$999

The Fleck Family FoundationAllison McDonoughSlipstream Foundation

FRIENDS$100-$499

AnonymousEllen BigelowCarla BrokBarbara & Gerald ChristensonThe Community Congregational

Church of Belvedere-TiburonRev. Sunday CoteRichard HodgsonInnsbruck InnSK Johnson Design, Inc.

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Patricia CavanaughDiane CharmleyDeborah & Wayne CharvatNoreen & Bob CoughlinGail, Kevin & Holly DoyleLinda EwaldLinda FifieldBarbara FlemingCheryl & Bruce FrizzleZimmie GoingsKaren GoodwinKarlyn & Larry HicksNancy HollowayDorothy HonerLynn & Robert JonesBarbara & John KilgallonDavid KozinskiKristina & Rob Krakovitz, M.D.Julie LawrenceMike LinskeyLinda LocatiCarolyn & Gary MatthewsJoanne McGlown

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