It has been a busy and productive year behind the scenes at the Universal Commons Project. This is a short update on some of the major developments that have taken place this year and a hint at the road ahead.
Our primary objective remains unchanged: to align profit and value. Since late last year, we have been working with a brilliant economist, Reuben Finighan, to help frame this objective in the most precise economic terms, drawing on insights from evolutionary biology.
This conceptual framework has given us new and powerful tools for understanding our objectives and the challenges we face, as well as offering promising solutions. We are currently working on a more detailed document that will explain this connection more thoroughly, so stay tuned.
Another key pillar of the Universal Commons Project has been improving the way we measure externalities that impact what we call Social and Natural Capital (SNC), such as particulate pollution that impacts clean air.
Last year we commissioned Nesta to investigate the current state of measurement of externalities and look at how we might contribute to improving it. Nesta’s initial report, delivered earlier this year, was illuminating. Nesta’s research indicated that while many externalities lack quality measurement, there are several that do have high-quality metrics, such as air pollution. Yet even with quality metrics, there is still not a strong market for these externalities.
This led to the realisation that measurement is necessary but not sufficient for the creation of a strong market in externalities. This observation led to the establishment of the Market Design Project (MDP), led by Gavin Starks at DGen. The MDP was tasked with looking at the requirements for building a market for externalities, along with who would be the buyers and sellers, and what kinds of regulation would be necessary to sustain it.
The outcome of the MDP was to show that a market requires a strong source of demand in addition to high-quality measurement. That demand can be generated in a number of ways, but when it comes to externalities, it often requires government regulation. One externality for which there is currently a market is carbon dioxide equivalent (CO2e), and we are using this market as a case study to see what we can learn that might be generalisable to other externalities, like air pollution or healthy communities.
Besides these technical challenges of improving measurement and creating demand, we have also identified that there is a critical knowledge gap in the general public about the importance of the problem that the Universal Commons Project is aiming to solve. We believe that many people are unaware of the role that externalities play in our economy and how they affect their individual and community wellbeing. We also believe they are largely unaware that our current economic paradigm allows businesses to degrade SNC without paying for it, and doesn’t reward those organisations that improve SNC.
Unless this knowledge gap can be filled, then we believe it is unlikely there will ever be sufficient public or political pressure to change the economy such that profit equals value. As such, we are investigating means of improving public awareness of this issue as well as partnering with like-minded organisations to spread the word.
In the near future, we will be releasing updated documents detailing the state of the Universal Commons Project and the projects we will be investing in. Stay tuned! And as usual, we welcome your feedback, suggestions and criticism.