NATURAL CAPITALISM

This document, a chapter from 'Natural Capitalism', argues that traditional design often relies on compromise and diminishing returns, whereas 'whole-system engineering' can 'tunnel through the cost barrier' to achieve massive resource savings at lower capital costs. By optimizing systems as a whole and thinking 'downstream to upstream,' designers can eliminate expensive equipment and create synergies that reduce both operating and construction expenses.

• A significant portion of a project's life-cycle economic and ecological costs are determined during the earliest stages of design. For buildings, spending just 1 percent of up-front costs can commit up to 70 percent of life-cycle costs, and spending 7 percent can commit up to 85 percent.
• Contrary to the economic dogma of diminishing returns, 'tunneling through the cost barrier' allows for larger energy and resource savings that can actually cost less up front than small savings. This is achieved by integrating design measures so that high efficiency allows for the total elimination or downsizing of expensive capital equipment, such as furnaces or cooling systems.
• Whole-system engineering avoids the 'pessimization' that occurs when components are optimized in isolation. For example, in industrial pumping, using larger pipes (which increases pipe cost) can significantly reduce friction, allowing for much smaller and cheaper pumps and motors, resulting in a lower total capital cost and lower energy use.
• The document highlights a case study of a carpet factory in Shanghai where applying whole-system design reduced pumping power from 95 horsepower to 7 horsepower, a 92 percent energy saving, while also reducing capital costs and improving performance.
• Efficiency improvements can be cost-effectively implemented by 'piggybacking' on planned renovations. In one example of a Chicago office tower, a whole-systems approach to window and AC renovation could quadruple energy efficiency and cost roughly the same as a standard renovation by using the savings from downsized cooling equipment to pay for higher-quality windows.
• Effective resource efficiency requires 'thinking backward' from downstream to upstream. Savings achieved furthest downstream (e.g., reducing friction in a pipe) have the greatest leverage because they reduce the requirements and costs for all upstream equipment (e.g., pumps, motors, and power plants).

APA

RMI (n.d.). NATURAL CAPITALISM. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_NCchapter6.pdf

Chicago

RMI. NATURAL CAPITALISM. n.d. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_NCchapter6.pdf.

Wikipedia

{{cite report |author=RMI |title=NATURAL CAPITALISM |url=https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_NCchapter6.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmindnatural, author = {{RMI}}, title = {{NATURAL CAPITALISM}}, institution = {RMI}, url = {https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_NCchapter6.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }