Release Date: 02-17-2015
The E3 Network—Economics for Equity and Environment—examines the impacts of new business models such as community-supported agriculture, sharing platforms, community energy, green jobs initiatives
February 17, 2015, Portland, Oregon — Couchsurfing. CSAs. Neighborhood energy. Local food clusters. Coops. Promising alternative business models are cropping up all around the country. Do they constitute the new economy people have been out in the street demanding—the one that delivers social and financial benefits broadly while restoring the environment? Ecotrust and the E3 Network—a national network of economists focused on equity and environment—deployed researchers around the country to find out. Armed with an analytical framework developed by a prominent national steering committee, these researchers looked deeply into how new business models function, what their impacts are, how scalable they are, and how replicable they are. Their research forms the initial body of work for the Future Economy Initiative.
“This level of analysis is sorely needed if we are to grow a better economy. Without it, it becomes easy to assume there’s no alternative to business as usual,” says Robin Hahnel, director of the Future Economy Initiative and professor emeritus at American University. “The Future Economy Initiative is bringing rigorous analysis to new markets for food, energy, housing and labor. We want to document the impacts of new models, to truly understand how they are succeeding and what their limits are.”
The Future Economy Initiative case studies, all hosted along with multimedia stories at FutureEcon.org, turned up a host of interesting – even startling – conclusions.
We love it, but it doesn’t pay. Community supported agriculture – CSA – is spreading like wildfire, with more than 6,000 farm businesses nationwide. Customers love the good stewardship practices of most CSAs and knowing where their food comes from. But researcher Mark Paul found that 80% of CSA farmers don’t make a living wage and most can’t pay one to workers either. Farmers remain committed to the CSA model; they just may need some policy help to evolve it.
Place-based initiatives create good jobs for the disadvantaged. Five hundred jobs in five Cleveland neighborhoods in one year, in fact, as part of the Greater University Circle Initiative effort to expand opportunities for low-income residents. Researchers Julia Poznik, Jonathan Ramse and Ruchira Sen show how shared effort and deep local knowledge by three large institutions, the Cleveland Foundation, and community organizations made it happen.
Park building can fight poverty. In Portland, OR, an innovative community organization called Verde has created social enterprises, organized neighborhood planning and trained up dozens of residents to land green jobs in the nursery, green building, and energy industries – all to harness growth for low-income residents and communities of color as Portland continues to grow green.
Sharing doesn’t always mean caring. New sharing platforms, from Couchsurfing to Craigslist, have huge benefits for low income users and grow important new relationships. Economist Anders Fremstad says we need to think about governance models for large sharing platforms to make sure they treat their users and service workers well. That needs to happen before they get too big to regulate.
Good news: This local food economy is not an island. Economist Kate Olson unpacked the hallowed food town of Hardwick, Vermont, held up as a model of the local food movement, and found that businesses depend as much on urban markets far away as they do on local outlets. This has been a good thing for everyone involved: Hardwick’s unemployment rate and poverty rate have shrunk as successful food businesses have grown.
Harnessing local energy can pencil out. Vancouver, BC started a neighborhood utility that is delivering 70% of local thermal energy needs for one district by harnessing heat from sewer lines. Economist Marc Lee found that the utility has established a reliable business plan while reducing greenhouse gases – a model that could be replicated around the world. Vancouver engineers are consulting globally to make that happen.
This first round of ground-breaking analyses establishes a practice of asking hard questions of new business models.
“If we are to truly build a more equitable, restorative economy, we need to engage business owners, communities, civic organizations, customers and active citizens everywhere in a lively public conversation about living and working in the future,” says Hahnel. “FutureEcon.org is our candid contribution to driving the dialogue forward.”
Ecotrust’s mission is to foster a natural model of development that creates more resilient communities, economies and ecosystems here and around the world. Ecotrust’s many innovations include co-founding an environmental bank, starting the world’s first ecosystem investment fund, creating a range of programs in fisheries, forestry, food, farms and indigenous affairs, and developing new scientific and information tools to improve social, economic and environmental decision making. Ecotrust works locally in ways that promise hope abroad, and it takes inspiration from the wisdom of Native and First Nation leadership. Learn more at ecotrust.org @ecotrust
About the E3 Network
Economics for Equity and Environment (E3) Network is a national network of economists developing new and better arguments for protecting people and the planet. Through applied research and public engagement, we seek to improve decision making and further understanding of the relationship between economy and ecology. More at e3network.org @e3network