Despite the widely held faith in the efficiency of free markets, the industrial capitalist model has arguably failed to deliver. Specifically, it fails to provide lasting economic security, food and shelter to large percentages of the world population. Furthermore, despite being blessed with the easy availability of massive amounts of fossil fuel, many countries are heavily in debt, threatening to burden each and every citizen for a long time to come.

The total land mass of the Earth is about 14,8 billion hectares. With a population of about 6,8 billion this means there are just over two hectares of land per person. Of this, only one hectare of land per person is habitable. We need to rethink what we invest in.

Whilst land is scarce and getting scarcer, so is oil. Figures from several sources indicate world oil production has reaches its maximum and is likely to fall per capita in the near future.

Peak Oil – undermining business as usual

Fossil fuel dependency characterises the current post-WWII economies and life style in developed countries. Even if not directly fuel dependent, all sectors rely on the transport sector which itself is entirely dependent on fossil fuel.

Out of 98 oil producing nations, 64 have already peaked in production, including the UK and Norway. Whether restricted by climate policy or by extraction not keeping up with demand, the coming ten to twenty years are expected to bring considerable hikes in fossil fuel prices.

Investors and consumers alike should question how resilient their societies are to price hikes in limited resources (oil being just one). Can current infrastructure and business models, indeed the whole economy, quickly adapt to these challenges

Business model paradigm change for changing times

The economic effects of high energy prices could be devastating. Just how and when this will play out is difficult to foresee. What is clear is that businesses that have been successful to date will be challenged to make a profit using their existing models in the turbulent times and environment ahead. This will mean that investment models will also be challenged.

In the time period we are discussing, up to 2030, it is hard to envisage a major political and policy change. Politicians will probably wait to address fossil addiction, and policy changes will be slow. A rapid transition, whilst best from a long-term economic and environmental viewpoint, will probably only happen if spurred on by extremely negative events.

The need to act locally

Many commentators, among them the Transition Movement in the UK, The Post Carbon Institute in the US, and the Stockholm Resilience Center in Sweden are of the opinion that only through increased local and grass-roots action will communities develop the ability to withstand drastic changes.

There is, I believe, the need for a local, resilient solution and investment opportunity that will provide a good standard of living even if energy prices and supply chains fail. This opportunity can be for investors, suppliers and individuals seeking a secure place to invest in and/or live in. We also believe that individuals who are engaged in sustainability issues would like to be part of developing a solution that can be adapted to work around the world.

Several powerful investment approaches have been flying under the radar, little attention being given to them as they have been overshadowed by the recent developments in derivatives and the ensuing worldwide financial volatility. One is eco-system services based investment, the other is asset based investment.

The Value of Eco-System Services

Piloted by the United Nations Millennium Assessment, Eco-System Services describes the services man gets “free” from nature. These include water purification, soil provision, production of building materials and energy production. Some estimates rate the total value of eco-system services many times larger than world GNP.

To put it another way “why pay when you can get nature to do the job” or as one person with a large solar installation put it “the sun does not send electricity bills every month”. Due to its climate, Brazil offers a high supply of eco-system services that could provide the basis for village living:

• Solar power for heat and electricity

• Year-round food production

• Carbon sequestration using carbon from rapid tree growth

• Natural water purification

• Local building materials – wood, clay, stone, etc.

Eco-villages are not new, but unique to our concept is the integration of food production, timber, services such as electricity and water/waste water as well as commercial services. With the right design, a quality standard of living and commercial services can be achieved where design reduces workload and nature does a lot of the work rather than in conventional models where fossil fuel provides an “invisible army of slaves”.

Eco-villages provide the local population with work and food security as well as positively influencing climate change. And they offer a return on investment.

The savvy village is designed to provide services such as conference facilities, housing and timber production letting nature do as much of the work as possible. Some examples:

• Complete composting and phosphor recycling system eliminates the need for expensive fertilizers. Grey water purification can be done by plants which get ample levels of free fertilizer in the process.
• From forest to building. Timber from our own forests goes direct to building. No middle men and no transport costs.
• Agro-foresty: The forest is planted with fruit, nuts, seeds that produce biofuel etc. Once set up, the forest will give a high yield without requiring the typical high maintenance that conventional agriculture requires.
• Solar energy. Solar brings heating and electricity and even cooling. The sun does not send a bill. Can even be used to purify water.
• Biochar: charring organic material improves soil, produces heat for cooking and sequesters carbon, a service that can be sold as carbon offsetting.
• Cooling systems from the soil. The ground under the soil is a constant 8 degrees Celsius. Ventilation air is cooled by passing it underground.