Chapter 1

The Challenge of Managing
Connected Systems

C. S. Lewis wrote, “Everything connects with everything else, but not all things are connected by the short and straight roads we expected” (Lewis, 1947). Those who hope to meet the challenges of providing sufficient fresh water, food, energy, housing, health, and education to the world’s 9 billion people while maintaining ecosystems and biodiversity for future generations know Lewis was correct on both counts.

WHAT IS SUSTAINABILITY?

A “sustainable society,” according to one definition, “is one that can persist over generations; one that is far-seeing enough, flexible enough, and wise enough not to undermine either its physical or its social system of support” (Meadows et al., 1992). This definition is consistent with the intent of the statement in the National Environmental Protection Act of 1969 (NEPA): “To create and maintain conditions under which humans and nature can exist in productive harmony and that permit fulfilling social, economic, and other requirements of present and future generations.” Sustainability issues occur at all scales from the global, such as the challenge of meeting the needs of a potential global population of 9 billion, to the national scale, to the regional and local scales.

Among many other disciplines, science plays a key role in advancing sustainability. Key features of the emerging field of sustainability science, launched just after the turn of the current century (Kates et al., 2001), include that it is problem driven; focuses on dynamic interactions between nature and society; and requires an integrated understanding of complex problems, necessitating a transdisciplinary, systems-based approach (see Box 1-1 for more information about important elements of the approach to sustainability).

A central goal of sustainability, although one often overlooked in this context, is to maintain and enhance human well-being. Human well-being is a mul-



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Chapter 1 The Challenge of Managing Connected Systems C. S. Lewis wrote, “Everything connects with everything else, but not all things are connected by the short and straight roads we expected” (Lewis, 1947). Those who hope to meet the challenges of providing sufficient fresh water, food, energy, housing, health, and education to the world’s 9 billion people while maintaining ecosystems and biodiversity for future generations know Lewis was correct on both counts. WHAT IS SUSTAINABILITY? A “sustainable society,” according to one definition, “is one that can per- sist over generations; one that is far-seeing enough, flexible enough, and wise enough not to undermine either its physical or its social system of support” (Meadows et al., 1992). This definition is consistent with the intent of the state- ment in the National Environmental Protection Act of 1969 (NEPA): “To create and maintain conditions under which humans and nature can exist in productive harmony and that permit fulfilling social, economic, and other requirements of present and future generations.” Sustainability issues occur at all scales from the global, such as the challenge of meeting the needs of a potential global popula- tion of 9 billion, to the national scale, to the regional and local scales. Among many other disciplines, science plays a key role in advancing sus- tainability. Key features of the emerging field of sustainability science, launched just after the turn of the current century (Kates et al., 2001), include that it is problem driven; focuses on dynamic interactions between nature and society; and requires an integrated understanding of complex problems, necessitating a transdisciplinary, systems-based approach (see Box 1-1 for more information about important elements of the approach to sustainability). A central goal of sustainability, although one often overlooked in this con- text, is to maintain and enhance human well-being. Human well-being is a mul- 13

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14 Sustainability for the Nation: Resource Connections & Governance Linkages tidimensional concept that includes physical and mental health across the lifespan, from prenatal development to old age. It also includes happiness, a more elusive state of being that has been increasingly studied and quantified in recent years. Issues of equity and security are other important dimensions of well-being, and range from safe neighborhoods to secure employment to the ability to pay for food and utilities to peace and security at the national level. Finally, well-being extends across generations; people who know that their chil- dren and grandchildren will have the opportunity for good lives enjoy an added measure of well-being. Government plays an important role in creating a sense of well-being; well-being is enhanced when society believes government is functioning in an efficient and effective manner. A common and useful way of thinking about sustainability is to refer to the three overlapping domains of sustainability. Each domain—environment, social, economic—contributes essential components to sustain human well- being (Figure 1-1). BOX 1-1 The Sustainability Approach Key features of the sustainability approach include: its “problem-driven” qual- ity, an orientation toward generating and applying knowledge that supports deci- sion making for sustainability; its focus on dynamic interactions between nature and society, using the framework of complex socioeconomic-ecological (also called human-environment) systems (Gunderson and Holling, 2002); its goal of an integrated understanding of complex problems, requiring trans-disciplinary, systems-based approaches; its spanning the range of spatial scales from global to local; and its commitment to the “coproduction” of knowledge by researchers and practitioners (Clark and Dickson, 2003; Kauffman, 2009). The systems approach is both formidable and necessary, in science as in policy making. Human–environment systems are complex, nonlinear, heteroge- neous, spatially nested, and hierarchically structured (Wu and David, 2002). Feedback loops operate, multiple stable states typically exist, and surprises are inevitable (Kates and Clark, 1996). Change has multiple causes, can follow mul- tiple pathways leading to multiple outcomes (Levin, 1998), and depends on his- torical context (Allen and Sanglier, 1979; McDonnell and Pickett, 1990). One important attribute of systems is their resilience, the system’s ability to maintain structure and function in the face of perturbation and change. A second key at- tribute is the system’s level of vulnerability: its exposure to hazards (perturbations and stresses) and its sensitivity and resilience when experiencing such hazards (Turner et al., 2003). The systems approach to science is ideally suited to supporting sustainable management, both in advancing fundamental scientific understanding and in informing real-world decisions. It underlines the importance of linkages among various players at different scales, such as government agencies, private firms, citizen groups, and others.

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The Challenge of Managing Connected Systems 15 Economic Human Well Being Social (including Environmental human health) FIGURE 1-1 The components or domains of sustainability that support human well- being. SOURCE: National Research Council, 2011. Adapted from Figure 3-3, Hecht, 2010. A healthy natural environment, though not the only component of sustain- ability, is an essential one; clean air, abundant and clean fresh water, biodiversi- ty of plants, fish, and wildlife, and robust, highly-functioning ecosystems are all desired aspects of a healthy environment. In addition to maintaining a healthy environment, a sustainable society also provides systems to support other im- portant societal values, including strong systems for preventive care and health care, public safety, transportation, energy, education, and housing. Societies also need strong economies in order to flourish. All of these components interact with and depend upon one another. So- cial cohesion and effective legal systems are needed for economies to function efficiently; for example, a healthy and robust social fabric helps to ensure the health and well-being of people. Economic and social systems all interact with the environment, through natural resource services and extraction, food produc- tion, water systems, and natural biodiversity. An approach to sustainability that includes human well-being provides a unifying framework for evaluating sustainability efforts. Moreover, this ap- proach has intuitive appeal to policy makers and members of the public, who value human well-being in assessing environmental, economic, and social trade- offs. Sustainability creates greater value, minimizes unintended consequences and ultimately improves the efficiency of government activities (see Box 1-2 and Box 1-3 for examples of federal agencies whose sustainability efforts have resulted in efficient use of resources and cost savings). Promoting sustainability reduces costs over the long term, which supports the economy and quality of life. The private sector has also embraced sustainability as a cost-effective or- ganizing principle (see Box 1-4).

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16 Sustainability for the Nation: Resource Connections & Governance Linkages BOX 1-2 Sustainability at National Aeronautics and Space Administration Facilities National Aeronautics and Space Administration’s (NASA's) sustainability pol- icy is to execute the agency’s mission “without compromising our planet’s re- sources so that future generations can meet their needs. Sustainability involves taking action now to enable a future where the environment and living conditions are protected and enhanced. In implementing sustainability practices, NASA manages risks to mission, risks to the environment, and risks to our communities, all optimized within existing resources” (NASA, 2012). Some select sustainability objectives include: increasing energy efficiency and the use of renewable energy; measuring, reporting, and reducing direct and indirect greenhouse gas emis- sions; conserving and protecting water resources; eliminating waste, preventing pollution, and increasing recycling; and designing, constructing, maintaining, and operating high-performance sustainable buildings, among others (NASA, 2012). Regarding the objective to design, construct, and maintain sustainable build- ings, the Kennedy Space Center (KSC) has undertaken several such initiatives for its facilities, including those related to solar energy, waste diversion, and envi- ronmental remediation, which have resulted in efficient use of resources and significant cost savings. For example, KSC leased land to Florida Power & Light (FPL) in 2008 to build a 10-megawatt photovoltaic (PV) system for electricity generation. For use of the land, FPL provided KSC with a 1-megawatt PV sys- tem. This was cited as an innovative partnership that “helped the federal govern- ment and FPL electricity consumers achieve the environmental benefits of using electricity generated from renewable sources, and also helped NASA reduce energy costs that consume mission resources.” With these innovations, the KSC facility is estimated to produce almost 1,800 megawatt-hours annually, saving the agency $162,221 in 2010. FPL’s facility will produce nearly 19,000 megawatt- hours. The two systems will produce more than 560,000 megawatt-hours of elec- tricity, saving KSC about $10.7 million during its expected 30-year life (NASA, 2011). KSC achieved a solid waste diversion rate of 56.21 percent in 2010 by recy- cling and reusing construction and office material, which has saved the agency money. For example, the Coastal Revetment Project at KSC used recycled ma- terials to replace an old decaying system with a new sustainable one. The 2.2- mile project incorporated 23,000 tons of concrete originating from demolished facilities, which saved about $3 million in project material costs. Additionally, the Environmental Remediation Program at the KSC embraced elements of sustain- able green remediation into projects, primarily through the alternative power and bioremediation. For example, the agency successfully decontaminated ground- water at nine Kennedy sites. “At the GSA Seized Property Yard, bioremediation saved an estimated $400,000 compared to a traditional pump-and-treat system” (NASA, 2011). RESOURCE CONNECTIONS AND GOVERNANCE LINKAGES Concerns about Earth’s sustainability in a form desirable to human habita- tion and quality of life traditionally rest on potential constraints to individual

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The Challenge of Managing Connected Systems 17 BOX 1-3 Sustainability and the Department of Defense The mission of the Department of Defense (DOD) is “to provide the military forces needed to deter war and protect the security of our country” (DOD, 2011). To successfully execute this mission, the military must have access to the ener- gy, land, air, and water resources necessary to train and operate. According to DOD, “sustainability provides the framework necessary to ensure the longevity of these resources, by attending to energy, environmental, safety, and occupational health considerations” (DOD, 2011). Incorporating sustainability into DOD plan- ning and decision making enables the agency to address current and emerging mission needs. Within DOD, the Department of Army is responsible for achieving sustaina- bility goals, including those related to renewable energy, in a fiscally prudent manner. The Army also serves as a test bed for developing and introducing new technologies for addressing sustainability challenges (Kidd, 2011). For example, the Army is leveraging available private-sector investment, including using power purchase agreements; enhanced-use leases; energy savings performance con- tracts; and utilities energy service contracts as tools to meet its objectives (De- partment of the Army, 2010). Regarding sustainable energy initiatives, the Army is pursuing initiatives such as utilizing waste energy or re-purposed energy using exhaust from boiler stack, building, or other thermal energy (Department of the Army, 2010). In addition, to support renewable energy goals, the secretary of the Army es- tablished the Energy Initiatives Task Force (EITF) on August 10, 2011, with the mission to “identify, prioritize and support the development and implementation of large-scale, renewable and alternative energy projects”—focusing on attracting private investments and delivering the best value to the Army enterprise (Kidd, 2011). EITF serves as the central managing office for the development of large- scale Army renewable energy projects. EITF is part of the Assistant Secretary of the Army for Installations, Energy and Environment (ASAIEE) that establishes “policy, provides strategic direction and supervises all matters pertaining to infrastructure, Army installations and contingency bases, energy, and environmental programs to enable global Army Operations” (ASAIEE, 2012). In order to respond to federal laws and energy di- rectives/strategies of DOD, the Army needs to coordinate energy goals with envi- ronmental and sustainability goals. “An enterprise-wide approach is necessary because cost-effective management of energy requires coordinated efforts across the Army” and the optimization of limited resources to ensure success (Army Senior Energy Council, 2009). natural resources. Rising prices resulting from resource scarcities generally have been shown to motivate technological innovations and substitutions that con- strain the likelihood of ‘running out’ of resources (Krautkraemer, 2005). Howev- er, the continued presence of externalities associated with the extraction and use of natural resources suggests that their management to achieve a blend of eco- nomic, environmental, and socially sustainable outcomes will not result solely

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18 Sustainability for the Nation: Resource Connections & Governance Linkages BOX 1-4 BASF: Integrating Sustainability into Business Practices A Private Sector Example BASF, a global chemical company, has embraced sustainability as an or- ganizing principle, stating that it has “strategically embedded sustainability” into the company as “a significant driver for growth” (BASF, 2013a). BASF defines sustainability as “balancing economic success with social and environmental responsibility, both today and in the future” (BASF, 2012; BASF, 2013a). The company has integrated sustainability into its core processes, including into the development and implementation of business units’ strategies and research pro- jects. It has also incorporated sustainability criteria into auditing processes for investment decisions (BASF, 2012). Sustainability issues are identified by the company using material analysis; top priority issues include energy and climate, water, renewable resources, prod- uct stewardship, human capital development, human and labor rights, and biodi- versity (BASF, 2012). The company states that sustainability management in- volves “taking advantage of business opportunities, minimizing risks and establishing strong relationships with our stakeholders” (BASF, 2012). As a result, BASF reported that in 2012, the company reduced its green- house gas emissions by 31.7 percent per metric ton of sales product and in- creased its energy efficiency by 19.3 percent compared with baseline 2002. Simi- larly, in 2012, the total emissions of air pollutants from the chemical plants into the atmosphere dropped by 63.1 percent to 31.580 metric tons (BASF, 2013b). from commodity price signals (Krautkraemer, 2005; Tietenberg, 2005). It is obvious that these constraints are real and, in many cases, problematic. Here are several examples:  Constraints on traditional energy supplies1 and challenges related to climate will require a transition to a broader mix of fuels over the next several decades, consistent with reducing greenhouse gas emissions and other environ- mental impacts (NRC, 2009; Chu and Majumdar, 2012). While market signals drive innovations in energy technologies and can influence the search for energy substitutes, the continued presence of externalities and impacts on environmen- tal goods such as biodiversity, air quality, and so on, associated with energy generation and use suggest the need for a decision framework and policies that incorporate and integrate these multiple considerations. Major efforts will be required because the required changes are so huge.  Global demand for nonrenewable resources such as metals is rising rap- idly, mainly in developing economies. Concomitantly, the use of progressively poorer ore grades will become a real problem in the future as demand and pro- 1 For example, there are geographical, geological, economic, legal, and environmental constraints on the future use of coal. The National Research Council’s report America’s Energy Future provides excellent reviews of these topics.

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The Challenge of Managing Connected Systems 19 duction increase, requiring ever more energy and water to enable ore processing (MacLean et al., 2010). The rise in demand for certain rare earths also implies that for the foreseeable future, recycling will not provide an important supple- mentary resource for these minerals. While increasing scarcities will likely drive up prices and stimulate development of substitutions, accessing traditional, poorer grade, or new metals all involve impacts to lands, potentially impact wildlife, and can affect other environmental amenities.  Population growth and improving quality of life are expected to place increased pressure on productive land, risking the loss of important ecosystems and their beneficial functions.  In addition, substantial growth is expected in global freshwater use. Consequently, the quality and quantity of available freshwater per capita will decrease in certain localities in the absence of significant changes in water man- agement and use patterns. Other constraints deserve consideration, especially those resulting from limitations involving connections among the resources. Although resource sus- tainability is a problem generally approached in a piecemeal fashion, it is a sys- tems problem, and the links that connect the resources are often more challeng- ing to address than those of the individual resources themselves. It may help to picture the challenge of sustainability as shown in Figure 1-2, where key re- source domains, including water, land, energy and non-renewable resources, are shown as squares, and areas that require these resources (industry, agriculture, nature, and domestic) are depicted as ovals. Human health and well-being inter- acts with all of these. It is common that scientists and decision makers specialize in one of these topics and are relatively unaware of the important constraints that may occur as a result of inherent connections with other topics. A near-complete linkage exists among all of these areas, yet tradition and specialization encour- age a focus on a selected oval and all of the squares or to a selected square and all of the ovals (Graedel and van der Voet, 2010). Graedel and van der Voet (2010) pose the question: Can we devise an approach that addresses them all as a system, to provide the basis for constructing a coherent package of actions that optimize the system, not the system’s parts? CONNECTIONS: THE SCIENTIFIC CHALLENGE OF UNDERSTANDING SYSTEMS In modern society, the interrelatedness of the natural and human worlds is even more complex. The systems that must be considered in addressing sustain- ability challenges are referred to in this report as social-ecological systems.2 These complex systems include the natural resource domains (air, fresh water, 2 The term social-ecological systems is an increasingly used research framework. Ostrom E. 2009. A general framework for analyzing sustainability of social-ecological systems. Science 325(5939):419-422.

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20 Sustainability for the Nation: Resource Connections & Governance Linkages coastal oceans, land, forests, soil, etc), built environments (urban infrastructure such as drinking water and wastewater systems, transportation systems, energy systems), and the social aspects of complex human systems (such as public health, economic prosperity, and the like). These elements of social-ecological systems are all interconnected, and the sustainability challenges that the nation faces rarely involve only one of them. Furthermore, the impacts of indirect connections to supply chains for manufac- tured and agricultural goods, or the connection to externalities such as the costs of the loss of ecosystem services, might also need to be factored in when ad- dressing sustainability challenges. Some connections are obvious. A coal-fired power plant provides elec- tricity, which provides social, economic, and health benefits, but it also expends a nonrenewable resource, uses water to provide steam, emits products of com- bustion into the air, and generates solid waste. Some connections are less obvi- ous. Battery-powered vehicles have no direct emissions to the atmosphere at the time of use, an apparent advantage over internal combustion vehicles. However, generating the electricity to charge the battery has impacts that may occur far away from where the vehicle is used. Also, disposal of battery can increase emissions due to energy consumed in recovering and recycling the materials. FIGURE 1-2 The links among the needs for and limits of sustainability. SOURCE: Grae- del, T. E., and E. van der Voet, 2010, adapted from Figure 1.2 The links among the needs for and limits of sustainability. Reprinted with permission from the MIT Press.

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The Challenge of Managing Connected Systems 21 Some connections become apparent only over time. Use of persistent pes- ticides in the production of crops in the 1950s was effective; however, some of the pesticides were eventually found to persist, bioaccumulate, and have long- term effects on higher species only after some period of use. Similarly, studies have indicated that exposure to endocrine disruptors during critical periods of development can cause delayed effects that do not become evident until later in life (European Commission, 2011). We call these types of situations temporal connections. Connections that are indirect can nonetheless be highly significant. De- mand for ethanol in the United States caused the price of corn to rise and caused a shift in land use from soybean production to corn production. To fill the void, land was deforested in other countries and planted in soybeans. This is an exam- ple of a spatial connection. Other connections occur when multiple demands for the same resources are influenced through economic markets. Consider the example of the sustainability challenge of growing sufficient food while also developing renewable energy from biofuels—the so-called food vs. fuel debate. The connections that must be considered include (1) the amount and type of land used to grow crops for food and that used to grow biofuels; (2) water use for crops as well as for biofuel production, transportation infrastruc- ture use and costs for transporting both; (3) the relative impact of greenhouse gas emissions (including the emissions from indirect aspects of the system, such as emissions associated with growing and transporting the crops and producing the food and biofuels, as well as emissions from end use of the crops and fuels); (4) impacts on energy consumption to produce the food and fuel (again includ- ing indirect aspects); (5) the impacts on food cost and its availability to all eco- nomic classes of the U.S. public; (6) the impact on local economies as well as the export and import of food and fuel; and (7) limited time offer government subsidies and longer term sustainable farming practices, such as crop rotation. The examples that the committee studied all reflected the interconnections among social-ecological systems. In Philadelphia, for instance, the effort to manage stormwater more sustainably by investing in green infrastructure3 rather than storm sewers is not just a water issue; it has impacts on air quality (through green plantings), energy consumption (water infrastructure), community well- being (through the creation of rain gardens), and neighborhood violence (through the greening of abandoned and overgrown lots). These connections are explained in more detail in Chapter 3. The Mojave Desert, discussed as another example, is used for recreation, housing, and military training and is a premium location for renewable energy development, as it has some of the highest-quality solar and wind resources in the nation. It is also home to mining, agriculture, and human communities, as well as unique ecosystems and a number of endangered species. The competi- tion between human-centric land uses and the desire to preserve species habitat 3 Green infrastructure refers to the management of stormwater runoff through the use of natural systems.

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22 Sustainability for the Nation: Resource Connections & Governance Linkages and manage on an ecosystemwide basis has increased the need for coordinated land management in the Mojave Desert. The interconnections in the Mojave Desert example were evident in conflicts over competing land uses. One cannot successfully address sustainability issues in a specific social-ecological system without first identifying the relevant connections. LINKAGES: THE GOVERNANCE CHALLENGE OF MANAGING CONNECTED SYSTEMS While addressing connections across natural and human system domains may be challenging, successful governance requires it. Ignoring connections raises the risk of policy actions that result in unintended consequences and inef- fective and inefficient outcomes. For example, pursuit of policies to augment use of lands for biofuels production will have impacts on water use, food pro- duction, and wildlife. Unless these connections are assessed, policies and in- vestments to promote biofuels could have unintended impacts on food com- modity prices and water availability (Tilman et al., 2009). On the other hand, sustainability approaches that optimize a bundle of benefits could help meet energy needs while simultaneously reducing greenhouse gas emissions, sustain- ing biodiversity, and enhancing food security. Sustainable management of con- nected systems calls for governance that effectively links across domains, as well as across geographic and temporal scales. The strong organizational linkages needed to support sustainability ap- proaches can be extraordinarily difficult to implement. Political realities some- times run counter to scientific and technical currents. As political scientist Eu- gene Bardach (1998) wrote, “Political and institutional pressures on public sector agencies in general push for differentiation rather than integration, and the basis for differentiation is typically political rather than technical.” These chal- lenges are the subject of Chapter 2, and possible solutions are examined in Chapter 5. REFERENCES Allen, P. M., and M. Sanglier. 1979. Dynamic-model of growth in a central place system. Geographical Analysis 11:256. Army Senior Energy Council and the Office of the Deputy Assistant Secretary of the Army for Energy and Partnerships. 2009. Army Energy Security Implementation Strategy. Washington, DC: U.S. Army. Assistant Secretary of the Army for Installations, Energy and Environment. 2012. Online. Available at http://www.army.mil/ASAIEE. Accessed February 28, 2013. Bardach, E. 1998. Getting Agencies to Work Together: The Practice and Theory of Man- agerial Craftsmanship. Washington, DC: Brookings Institution. BASF. 2012. BASF Report: Economic, Environmental, and Social Performance. Online. Available at http://www.basf.com/group/corporate/en/function/conversions:/publish

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