NATURAL CAPITALISM

The text advocates for 'whole-system engineering,' a design approach that optimizes entire systems rather than individual components. It introduces the concept of 'tunneling through the cost barrier,' where extreme efficiency can actually reduce total capital costs by eliminating the need for expensive equipment. Through examples in industrial pumping, building design, and office renovations, the author demonstrates that integrating design and 'thinking backward' from downstream to upstream creates compounding savings and multiple benefits.

• A significant portion of a project's life-cycle economic and ecological costs are determined during the initial design phase. Specifically, in typical buildings, up to 70 percent of life-cycle costs may be committed when only 1 percent of up-front costs are spent, and up to 85 percent are committed by the time 7 percent of costs are spent.
• The document challenges the economic dogma of 'diminishing returns'—the idea that each increment of resource saving costs more—by proposing the concept of 'tunneling through the cost barrier.' In this model, achieving very high levels of efficiency can reduce total up-front capital costs because the efficiency measures allow for the elimination or downsizing of expensive equipment.
• Whole-system optimization in industrial pumping can lead to drastic energy and cost reductions. An example at an Interface factory in Shanghai showed that using larger pipes to reduce friction and laying out pipes before installing equipment reduced pumping power from 95 horsepower to 7 horsepower—a 92 percent energy saving—while also reducing capital costs.
• Integrating high-efficiency components into building renovations can quadruple energy efficiency at a cost similar to standard renovations. For a 200,000-square-foot office tower near Chicago, using superwindows and daylighting could reduce cooling loads by 85 percent, making replacement cooling equipment 75 percent smaller and $200,000 cheaper.
• The 'think backward' approach involves optimizing a system from downstream to upstream. Because losses compound, a saving made furthest downstream (e.g., reducing pipe friction) has the greatest leverage, reducing the required size and cost of all upstream equipment (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} }