Chapter 1

Introduction in investments theory and practice for sustainable development

The concept of investment Investments definition The concept of efficiency and effectiveness of investments Investments for sustainable development and the new economy Investing in product eco-design Investing in sustainable production. The evolution of the sustainable production concept Technical and economical demands for investing in production systems Good examples of sustainable development models. The Dutch approach Review the literature The aim of the investment course on sustainable development bases Summary and recapitulation

1.1 The concept of investment In every day life we very often hear a word: investment related to someones intention to do something. For instance, it is usually for someone to say: Ill make an investment by buying a property or a car. Others say: my investments are my kids, their education and achievements. The Public administrations managers and leaders are talking about investments into infrastructure development or sustainble investments. The capital marketsbrokers are also talking about investments. The question is: The investments have the same semantics for all the people mentioned above? The answer might be yes and no as well. The yes stands for the fact that the investments must bring a certain benefit either economic, called profit, or other benefits (environmental, social, technical etc.).

Investments and risks for sustainable development

It means that only the spendings in assets (tangibles or intangibles) or services which are able to generate profits or other benefits could be considered investments. From this point of view, the properties (lands and buildings) are considered investments only if they are a support for production or services activities on profit bases (incomes is greater than spendings) or if they are for rent, bringing an income greater than spendings. The no stands for the idea that we dont consider our house or car as an investment. These are spendings for our living needs or for the improvement of our life standard. Our car or house becomes an investment if it brings an income (car used as taxi, house and land for rent etc.). Other aspects about investments are related with the intangibility characteristics. A good example are the investments in education or professional specialization. For example, the parents and the society through public support system invest in the education of their sons and daughters as your parents did for you, with the hope that the youth will bring more knowledge and skills for their professions. The government and the public administration are making investments in order to develop the infrastructure or environmental rehabilitation that will support future economic activities. In the case of education, health, environment and infrastructure the investment are not judged from the economic profit point of view but from the benefits brought by time. For instance, having better educated and well skilled individuals a society could develop faster. A better transportation infrastructure (roads, highways, ports, airports, bridges etc) that usually is the subject of public investments represents the support for other economic profitable activities within economy as production, trade, tourism etc. Investments in health are beneficial for the general state of population health knowing that healthy people are productive and have a low impact on public health insurance budget. So, we could give a definition for investment as it follows: 1.1.1 Investments definition Investments are a present spending for a future gain either profit or other benefits (ecological, social, technical, skills etc.) as mentioned before. As a conclusion we relate the investments with the future in all that it concerns. Therefore, we well use a new approach different from the classic one in which only the economic profit prevails as a basic indicator. The new approach is to relate

Introduction in investments theory and practice for sustainable development

investments with the sustainable eco-development concept and the new economy based on the information society concept. That means to care about future and to adapt to the change and to make the investments sustainable. This is not a fashion, it is a reality that already is present in well developed countries. The European developed countries, as the Netherlands, Sweden, Germany, Great Britain, France, Norway, Danmark, Finland, Austria, Belgium, Portugal, Spain, etc. or other great economic powers as USA, Canada, Japan, Australia, or transition economies as China, Russia, Romania etc. are investing in their own economies on sustainable development basis and putting the foundation for a new economy based on information technology. The non-classical approach, based on sustainable investments and new economy, is necessary for Romania on its access to European Union economic integration. 1.1.2 The concept of efficiency and effectiveness of investments The efficiency as a word is well known, too. It is coming from the latin word efficere that means to do well what are you doing, at time and with optimum consume of resources either human, material or financial. If we deal with the economic efficiency of investments that means to put in balance efforts (financial, human, technical etc.) with effects (gains as turnover, profit, production, services, products, impact on enviroment etc.). For example, an investment in a building is efficient if the time of completing and the return on investment(ROI) is fullfiled at the desired time without any timedelays and resources overconsumptions.

e=

EFFECTS 1 where e = efficiency coefficient EFFORTS

The efficiency coefficient e help us to select a variant of a project investment from others taking as a base the ratio effects/ efforts there were seen as profit/ costs, for instance, or products made / optimum quantity consumed resources. Effectiveness is coming also from the latin word efficacere and means to do the right thing, to do with the lowest consumption of resources either uman, material, technical or financial. In a practical way it means that an investment is effective if it is the most adequate for the purpose involved and it is done with the lowest (or optimum) consumption of resources. For example, an investment in a building is effective if the desired utility is fullfiled and the consumption of resources during using is the most appropriate. 1.1.3 Investments for sustainable development and the new economy The concept of sustainable development has emerged in the seventies due to the general concern about the global environment, as a result of pollution and an increasing usage of sources for raw materials and energy.

Investments and risks for sustainable development

Sustainability means the rearrangement of technological, scientific, environmental, economic and social resources in such a way that the resulting heterogeneous system can be maintained in a state of temporal and spatial equilibrium (Brand, 1988), while a Sustainable Development is a development that meets the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland,1987). As a result of the definitions of a sustainable development, a sustainable production can be defined as an industrial activity resulting products that meet the needs and wishes of the present society without compromising the ability of future generations to meet their needs and wishes. As a consequence of this definition, a sustainable production will minimize the pollution of the global environment as well as the use of natural sources of raw materials and energy. A possible way to reach these requirements is by a continuos improvement of industrial activities with respect to: - reduction of energy usage of non-renewable energy sources, - usage of recovered goods, parts and materials from discarded goods, - sustainable product quality. A sustainable production implies that all phases of the product are viewed with respect to the requirements, from the exploitation of raw material and energy sources until the recovery of materials, see figure 1.1. In the chain, the different industrial activities can be distinguished: - exploration of raw material and energy sources, - transformation of raw materials into materials, - product design, - transformation of materials into products, - recovery of goods, parts and materials. To arrive at sustainability for the complete chain, each activity of the chain should be sustainable. That means that three main activities of the chain have to be optimised: product design, transformation and recovery. The product design determines the material and energy usage of a product during his entire life cycle and the percentage of recovery. During the transformation activity, material and energy usage is depicted by the used processes and systems, while this activity determines the product quality too. During recovery, the quantity and quality of recovered goods, parts and materials are determined by the processes and systems.

Introduction in investments theory and practice for sustainable development

Research & Development of product and process

Materialproduction

Fabrication of end-products

Selling & Distribution

Use

Wasteprocessing

INPUT

OUTPUT

Raw materials & Energy

Waste & Emissions

REUSE & RECYCLING

Reuse during the production time stage

Reuse in the end-product lyfe cycle phase

Reuse after end-product life cycle phase

Figure 1.1 The various phases of a product

Product and production belongs to each other and are coupled on the technology: product-technology-production. Innovations are obtained by new technological opportunities while demand is dictated by the market. Because of the given relation, the choice of the technology is very important, not only technically but also economically, ecologically and socially. This is summarised in table 1.1 which gives a product / technology matrix, divided to the aspect: known, new, unknown.
Table 1.1 Product / Technology matrix

technology product known new unknown

known 1 2 product development

new 3 4 product development

unknown production process development research

Manufacturing a known product with a known technology (section 1) does not give risks but the lowest profit rates. Production of new products, which means products which have not been manufactured before, is more difficult. If these new products are manufactured by

Investments and risks for sustainable development

means of a known technology the risks can be overseen. Examples can be found in the automotive industry and all other branches of industry where product innovation is applied. Mostly it concerns product redesign and not a totally new product. In order to improve the efficiency of production process, new technologies are used to manufacture a known product. This strategy is applied to reduce the costs (less energy, less waste, less labour, less pollution). Besides, the effectivity can be improved by means of a higher product quality. For instance, an industrial automation results in a better quality because of a better process control. Manufacturing of new products by a new technology will give high risks. An example is the manufacturing of mega-chips. To arrive at a sustainable product, mostly the product has to be redesigned, as this phase depicts the material usage and environmental load during the entire life cycle. The technology is known as a sustainable production requires a continuos improvement of efficiency and effectivity. For a company, the reduction of materials and energy by applying sustainable production techniques may result in decreasing production costs and indirect costs as a consequence of the avoidance of a polluting production and low quality products and processes. Furthermore, the company will be more competitive because the market will demand for sustainable products in future. In the next sections, known technologies are described to arrive at a sustainable product design and a sustainable production. Furthermore, ways are given to introduce the sustainable production concept in the industry. But before the introduction, the market demand for sustainable products and the society demand for a sustainable production is indicated. 1.2 Investing in product eco-design The product design is important for all activities in the chain in order to create an integral chain control with respect to a sustainable development. Almost all limitations are the result of the product design. A product eco-design can be defined by: - the development of products where, in the design decisions, an integral chain control is weighted equally compared to more traditional quantities, like economics, quality, functionality, aesthetics, ergonomics, innovation, and image, in such a way, that the potential influence of the products upon the environment and the material and energy sources is reduced significantly (derived from the definition of an environmental friendly design by Brezet et al., 1994).

Introduction in investments theory and practice for sustainable development

To create a sustainable investment, the choice of the materials and the way the product structure has been composed, are very important. Therefore the following activities should have a high priority for the product ecodesign: minimal usage of virgin materials, minimal energy consumption during the production and usage periods, usage of materials which can be recovered easily, eco-design with easy to divide materials, easily disassembled or dismantled oriented product design, eco-design so that parts and the product have long life cycles. The aim is to have the requirements with respect to sustainability from the beginning of the design phase, using concurrent engineering and concurrent economics: a systematic eco-design of products and the processes needed for their production, where all elements of the product life cycle are considered by a multidisciplinary designers team, from the concept until the disposal phase, including quality, costs, planning, productibility, users demand, maintenance and environmental requirements (Constance, 1992). New views like the environmental requirements can be handled systematically in the design phase, e.g. by applying QFD (Quality Function Deployment) to translate the market demands into a design of a green product. 1.3 Investing in sustainable production. The evolution of sustainable production concept The purpose of production, at least idealistically, is to enrich society through the production of functionally desirable, aesthetically pleasing, environmentally safe, economically affordable, highly reliable, top-quality products. These noble objectives are often conflicting for economic reasons. Since the first use of machine tools there has been a gradual trend towards making machines more efficient by combining operations and by transferring more skill to machines. Technical development has made it possible to attain high productivity rates which are essential for any society willing to enjoy high living standards. Until the sixties, all that was produced, was sold, because of the seller's market. Although the price was important to increase the market share, the pressure to the prices was not extremely as the profits in that time show. However, as the seller could choose more and more between various producers, the price became an important weapon.

Investments and risks for sustainable development

In the past, it was tried to obtain an efficient organisation in order to have a higher production output. But now the price pressure requires an efficient organisation in order to reduce the cost price. To be competitive, management focused on reorganisations and transferring the production to low wages countries. At the beginning of the seventies, the buyer became aware of the quality of the product. As a part of the industry, and especially in Japan, offered products with a high quality for low relatively low prices, together with efficiency, quality became an important aspect to stay competitive. At the end of the seventies, the seller's market changed into a buyer's market. Therefore the battle for the attention of the buyer became more difficult. Especially Japanese firms increased their product assortment and shortened the life time of a product. The buyer liked the choice he could make now and showed this in buying this kind of products. So, besides being efficient and producing with a high quality, product assortment, delivery time and the look of a product became very important. This all resulted in a tremendous time pressure: companies had to introduce faster new products to the market, so that the development times has to be reduced, while the products had to be delivered faster. So the company had to be flexible too. To fulfil the requirements, the companies have introduced cost awareness, quality programms and techniques to become more flexible. This should be handled as a continuos process of improving. The cost awareness implies that e.g. material waste is avoided, the quality programm state care that defect products are avoided while flexibility results in avoiding of time waste. This all means that at the end of the continuos improvements, a state of sustainable internal production is obtained. It is obvious, that these improvement processes are related directly to the design of the products. On the shop floor, the improvements in costs, quality and flexibility can be measured by using the Transformation Factor (de Ron, 1994). This factor reflects the deviation of the production system from the ideal situation. It is related directly to the activities of the shop floor as it is expressed in terms which are familiar to the shop floor and the operational departments. Furthermore, the transformation factor should be clear to management as well as relevant. Maskell (1989), suggests that new performance measures should be introduced beacause the known measures can not be used satisfactorily. He mentions some characteristics for these measures which are fulfilled by the transformation factor.

Introduction in investments theory and practice for sustainable development

1.3.1 Technical and economical demands for investing in production systems A type of technology is used to process the raw materials, other types are used in the production stage resulting in final product. For that reason the technology puts together materials, technological equipment and machinery, human experience and methods of organisation. The chain by which raw materials are transformed into final product is called a production system and consists of three essential parts: input, process and output. (see figure 1.2).

Production system

Input Consumer demand Material Money Energy Human resources Education

Process Design Production Management

Output Consumer goods Capital goods Satisfaction and quality Cost effectiveness

Figure 1.2 Parts of a production system (after Ad de Ron, 1994)

A sustainable production system, is a production system that will have less impact to the environment, it's end products as well, being characterized by: (1) reduction of energy usage from non-renewable sources, (2) closing the production chain by introducing recovery of the goods, parts and materials, (3) increasing the sustainable product quality (de Ron, 1994). To transform an existing production system into sustainable one some of the next strategy could be followed: Total Excluding Strategy: characterizes the situation in which either it gives no market demand for the product, or the product doesn't fulfil the sustainability requirements;this means that there are no economical-ecological reasons to maintain it. Reconverting Strategy: characterises the situation in which it gives to a market demand for the products, or the products don't fulfil the sustainability requirements and (the product) could be replaced on the market, with other

Investments and risks for sustainable development

types of products resulting from other types of technologies; in the mean time the technical facilities (machinery, equipment etc.) could be used in remodelling the process (in a sustainable way) for other (sustainable) end-products with other segment market destination. Reconfiguration Strategy: characterises the situation in which it gives a market demand for the product at affordable price, but the product doesn't fulfil the sustainability requirements, or the technological chain is not sustainable itself and there are not enough investment funds to finance the total replacing with a new one; Total Replacing Strategy: characterises the situation in which already exists a market demand for the products, and because these are not sustainable, and the technology to produce them is not sustainable as well but there are enough money to buy another to fulfil the sustainability requirements. In figure 1.3 are presented the alternative strategies.

MARKET DEMAND FOR SUSTAINABLE PRODUCTS

THE CARE FOR ENVIRONMENT

SUSTAINABLE PRODUCTION SYSTEMS

TOTAL EXCLUDING

RECONVERTING

RECONFIGURATION

REPLACING

EXISTING PRODUCTION PROCESS SYSTEMS

Figure 1.3 Making sustainable the production systems through investments

This strategies could be used with success, especially in the Middle and Eastern European Countries in the process of integration in the European Union, because of the characteristic conditions of the transient period from centralised state economy to market economy that made possible deep transformations in the economies of these countries. The economic transient period is characterised by the transfer of

Introduction in investments theory and practice for sustainable development

the property of production systems from state owned to the private and public owners. Managerial and technical changes are taking place in the production systems in order to adapt to market demands. The situation is different from case to case and it requests an adequate analyse because the production systems of Middle and Eastern Europe have specific different problems (some have to be improved, other to be replaced, other to disappear- depending on the requested level of technological quality and on the usage degree). The overused and old equipment and technologies which are still running couldn't be replace "over the night", because of the lack of investment funds, and socioeconomical aspects, therefore a new type of strategy of renewal is requested to combine self-improvement and technology modernisation. That means that selfadaptability, experience and creativity of the people employed in firms to become important resources for self development on a sustainable way. The factors which have to be considered are: 1) Training and education at all levels to stimulate and encourage quality in working processes; 2) Flexible organisation; 3) Creativity stimulation; 4) Private initiative stimulation (state laws and firm's policy levels); 4) Industrial property (patents, brands, design, author's rights and obligations for individuals and firms); 5) New sources of (local, foreign) investments based on mutual advantage; 6) Partnership with much-experienced firms (local or foreign) based on mutual advantage; 7) Environmental moral behaviour stimulation based on the assumption that the end products are personal but the environment belongs to all not just to present but also for the future generation (future generation responsibility behaviour); 8) Encouraging the traditional local experience (if is feasible); 9) Encouraging the use / reuse of local materials and energy. 1.3.2 Good examples of sustainable development models. The Dutch approach Following the Brundtland Report (1987), the DutchNational Environmental Policy Plan' was adopted by the government and the parliament (in 1989). In the plan three elements are central: 1) Integrated chain control: closing the raw material cycles. 2) Energy reduction: energy saving, increase of the energy efficency and using durable energy sources. 3) Quality improvement: in order to increase the material life time.

Investments and risks for sustainable development

The objectives are a large reduction of emissions and energy consumption, and the use of non-renewable raw materials by means of material recovery. On the short-term, the environmental mess should be cleaned up as soon as possible, requesting for new environmental technologies with specific aims and functions. A number of such technologies to reduce emissions to water and air already exists or could be developed in the short-term. On the medium-term, it is expected that within 5-15 years most end-of-pipe and curative technologies have been installed, and that products will be redesigned in an environmental - friendly way. The technological developments go on, and it is expected that new technologies, new products, new processes will be developed in the mean time, which, however, may create new sources of environmental pollution. Thus a second objective for the technology policy is to influence the development of new technologies in such a way that new technologies products, and processes do not create new environmental problems,but reduce further the impact of older technologies. One of the problems to be solved is how to influence technological development in such a way that adverse affects do not occur in the future. This is a well-known question for technology assessment. New concepts like ' Comprehensive Life Cycle management ' which reefers to the management techniques (towards use of energy, leakage losses, organisation, finance and logistics) and ' Life Cycle Assesment', (the Comprehensive Life Cycle Management and Life Cycle Assesment - LCA, technical methodes that analyse, quantify and take measures about the environmental consequences of a product on a scientific and systematic basis through it's entire life-cycle: from extraction of raw materials, production, use, disposal and the transportation between those phases)(B. Mazijn,1992), the ' Cascade ' (the concept of using the potential properties of a product or resource in various subsequant stages) (Hans van Weenen, 1992) and new type of exploration, the so called 'Environment-Oriented Technology exploration' ( a scientific way of research made to show how to explore the environment while taking environmental objectives as a focal point) (P.J. Vergragt, L.Jansen 1992), are investigated in order to be applied in practice. The short-term and the medium-term investigations and instruments take the present situation as a starting point, so the present policies seem to be evolutionary that means they continue to adapt incrementally improving most of the present technology. Thus paradigm shifts and fundamentally changes in technological systems do not appear in this type of policy making.

Introduction in investments theory and practice for sustainable development

The long-term Dutch strategy for environmental policy settled in 1990 by the Dutch Commission for Long-Term Environmental Policy proposes ten radical changes from a radical change in recognition to a radical change in dialogue. They put the bases for the"Sustainable Technological Development programm (STD)" that present the sustainability criteria for the year 2040. STD establish that: "Technology can never be more than a tool, an instrument among others; the type of technology that will be developed is very much dependent on the structural and cultural conditions that prevail in society". The programm underlines the fact that the core of the problem is not to consider the technology as a major part for the solution of environmental problems or propagating technology as a "panacea", but the most important is that the potential of technology should be exploited to a maximum. STD, states also that the eco-capacity of the earth has already been exceeded and taking into account that the global population will grow by a factor 2-3 in the next 50 years, the eco-capacity of the earth will be exceeded by a factor of 10-50 if the efficiency of the technology with respect to the environment remains roughly the same. Therefore to fulfil the future needs of humans new technologies are necessary and they are not to be developed earlier than 50 years from now. As the time is pressing we have to start it now. To investigate new developments can be used the backcasting method, where a picture of a most likely future situation is created as a starting point, to think about the (technical) means which are necessary to reach this state. Several steps have to be followed: 1) Creating a social support for the challenge to technology developers. 2) Problem of definitions for the development of new technologies i.e transportation, housing etc, as well as the level of systems (transportation systems, housing system, etc), as well as the level of products (vehicles, houses) or utilities (motor, component parts of the houses, heating installations for housing, energy, materials etc.). 3) Problem chosen for being elaborated. 4) Creating demonstration projects (to set examples in housing, transportation, food/, clothing and recreation, generally known having a large social impact) in which a new approach or technology will be developed that must lead to a communicative design which means a design that fulfils, not just its functions, but also, sustainability and easy communicability to other technology developers and the public. 5) Setting the social conditions in which sustainable technology function. 6) Techno-economical feasibility study of sustainable technologies. 7) The people gain trust in technology.

Investments and risks for sustainable development

The aims of STD programm are: - To illustrate the possibilities; - To indicate the barriers; - To stimulate a broader discussion; - To motivate technology developers. The Dutch government presented in 1991 a document 'Technology and the Environment', following the National Environmental Policy Plan. In this document the strategies for a technology policy for the environment, was presented. However, it appeared that by this policy, in the long-term the goals of sustainability, could not be reached. Either consumption would have to be reduced drastically, or drastical changes in technological trajectories and systems would have to be achieved. (Philip J.Vergragt, Leo Jansen 1992). Therefore, a new technology program, has been presented by Philip J. Vergragt and Leo Jansen. The programm starts by the assumption that it takes decades to develop completely new technological systems. In order to fulfil sustainability criteria in 2040, i.e. on a time scale of 50 years, research will be started to investigate the possibilities of new technologies or technical systems that fulfil human needs and at the same time fulfil the requirements of sustainability, it has to be studied as well as, the interaction between new technologies and society. Furthermore, the programm states that the role of technology in solving the environmental problems, is often ambiguous, because, the introduction of 'clean' or 'cleaner' technologies is not enough. Structural and cultural changes are necessary to reduce production and consumption in society. As the technology reflects the norms and values of the society, it is important to"give the highest priority to the introduction of changes in social norms and values with regard to the environment, e.g. to work on changing life styles and changing economic structures. The contribution of technology is necessary, but not sufficient, and work on the 'cleaning up' of technology in interaction with culture and structure is as essential as working on norms and values". (Ph.J Vergragt, Leo Jansen 1992).

Introduction in investments theory and practice for sustainable development

BACKCASTING
Look backwards from the future and work ahead

1990
Culture Technology Construction Transportation Manufacturing Agriculture

2040
Supply
Shelter Movement Clothing Feeding

Less energy
Close materials cycles Avoid Environmental Risk

Structure Demand Activities

Needs Demand for technology to fulfil needs at many fold Environmental Efficency

Fig 1.4 The model of the Dutch Programme" Sustainable Technological Development (STD)" (adapted from Design for Environment 1992)

Summarising STD, results as: Technology alone will not give sustainable development. Conditions for technology development will have to be changed. Cultural & structural changes will be necessary to support sustainable technology. Environmental efficiency of technology will have to increase factor 20. Illustrative processes to illustrate potentialities of technology.

1.4 Review the literature The literature in the field of sustainability, sustainable development, sustainable industrial production deals with various aspects concerning the triangle mantechnology-environment, starting with philosophical assumptions and finishing with economic, social, technical, political, environmental previews, analyses and study cases. These appeared and developed as a political and scientific world reaction to now-a-days problems related to technology and human society development and the capacity of the earth to face this in the context of pollution degree rising and raw materials and energy scarcing. Many books, research paper works and scientific articles give brief conceptual definitions of sustainability, sustainable development and sustainable industrial production, try to find or impose models (mathematical, phisical, economical, social, etc.) in order to give a solution to the up-mentioned problems.

Investments and risks for sustainable development

Jeroen C.J.M. van den Bergh (1991) presented a "study that deals with long term, dynamic models that offer insight into global and regional dimensions of Sustainable Economic Development (SD). The book consists of three parts. First, the conceptual background of the study is outlined, thereby emphasizing economic and regional development, ecological processes, and ethical concern for environment and future generations. In the second part these elements are integrated in dynamic models of development. A general material balance, multisectorial model is designed for linking development with natural environment. It is based on a description of two-way economic-environmental interactions. Subsequently, this model is extended to represent an open system by taking crossboundary flows and external influences into account. In the third part, an attempt is made to operationalize SD models in two case studies (for the Netherlands and Greece)". The Dutch Committeee for Long Term Environmental Policy (1991), by the book "Towards a sustainable future" exemplifies the search for a new social order, an order in which the economic development and environmental protection are considered interdependent. The four main elements of this search are: (1) signs of hope, towards a sustainable future, (2) transformations which are needed to reach this future, (3) philosophical and methodological reflections; and (4) the necessary changes in the basic institutions of society. The central conclusion is that is important to establish a green strategy aimed at sustainability. As the committee states, " There is no certainty and no statistical probability for a sustainable future, but at least there is a chance". The US National Academy of Engineering (1989) published a study called "Technology and Environment" dealing with concepts as " paradox of technology" meaning it can be both the source of environmental damage and our best hope for repairing such damage today and avoiding it in the future(J.H.Ausubel, R.A.Frosch, R.Herman), "industrial ecology as an industrial metabolism" examining the totality or pattern of relations between economic activity and the environment (Robert U. Ayres, R.A. Frosch and Gallopoulos, 1989) and the "dematerialization" characterising the decline over time in weight of the materials used in industrial end products, or in the "embedded energy" of the products with the effect that less material could translate into smaller quantities of waste generating both production and consumption. In his doctoral thesis, H.J.M.de Vries (1989) "Sustainable Resource Use, an enquiry into modelling and planning" make a brief analyse of the concepts of sustainability and the sustainable development. He gives a formal definition of the modelling relation of the resource dynamics and make study cases from ecology, economy and social sciences using optimal control theory, catastrophe theory and non-linear dynamics.

Introduction in investments theory and practice for sustainable development

In "Sustainable Development", Michael Redclift (1989) argues that "if the work of the World Commision on Environment and Development (Brundtland Commission 1987) is to be taken seriously we need to redirect the development process itself, to give greater emphasis to indigenous knowledge and experience and to take effective political action on behalf of the environment". In Economics, Growth and Sustainable Environments (D.Collard, D.Pearce, D.Ulph 1990) the sustainability user cost concept is introduced. They show that sustainability could imply the use of environmental services at rates which can hold over very long time periods and, in theory, indefinitely, but put the question of the quality of the survival. 1.5 The aim of the investment course on sustainable development bases The aim of the investment course is to underline the importance of [re]designing or choosing the adequate technology of the future, the ways to reach to sustainability level in industrial production systems in the specific transient-economic conditions of Romania, taking as an example, housing industry investments. It is assumed the idea that developing sustainable systems in Romania, housing industry could be an exemple model, one has to start from the existing conditions (cultural, social, technical, economical) and using creativity and innovation to give a new value to the work taking into account quality, flexibility and continuos improvement of the production systems. Production development could solve social-economical problems as unemployment or inflation. It is necessary to underline the difference between the concept of growth and the concept of development. "Growth and development are not the same thing. Growth can take place with or without development, and development can take place with or without growth. Growth is an increase in size or number and occurs in organisms without choice. Development is a process in which an individual (firm, society, nation) increases his [her] ability and desires and those of others. It is an increase in capacity and potential, not an increase in attainment. It is more a matter of motivation, knowledge, understanding, and wisdom than it is of wealth. It has less to do with how much one has than with how much one can do with whatever one has. Development is the potentiality for improvement, not the actual improvement of the quality of life or the standards of living".(R.L.Ackoff 1981). This mention have to be made for understanding the fact that the way of reaching to sustainability in industry of Romania ( housing industry, for example), is not necessary the growth but is necessary the sustainable development. The rise not in size but in quality.

Investments and risks for sustainable development

I've mentioned that in order to avoid the confusion which existed during centralised economy period when growth means development and vice-versa. Therefore the sustainable industrial development of Romanian economy could be realized with existing economical and technical means but using more efficient the resources involved ( human resources, technology and money). . Romanian firms could become more economical and technical feasible, more competitive, if, following an appropriate strategy of inducing sustainability in their production process and technologies develop themselves. This could have benefit results for the whole Romanian economy, because it is well known that the industrial production influences all other economic branches, as constructions, agriculture, production of industrial and domestic goods, transportation, energy, trade etc. 1.6 Summary and recapitulation Investments are a present spending for a future gain either profit or other benefits (ecological, social, technical, skils etc.) as were mentioned before. As a conclusion we relate the investments with the future in all that it concerns. Therefore, well use a new approach different from the classic one in which only the economic profit prevails as a basic indicator. The new approach is to relate investments with the sustainable eco-development concept and the new economy based on information society concept. Sustainable Development is a development that meets the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland,1987). For future investments purposes, to arrive at a sustainable eco-product, mostly the product has to be redesigned as this phase depicts the material usage and environmental load during the entire life cycle. The technology is known as a sustainable production requires a continuos improvement of efficiency and effectiveness. Technology alone will not give sustainable development: Conditions for technology development will have to be changed. Cultural & structural changes will be necessary to support sustainable technology. Environmental efficiency of technology will have to increase factor 20. Illustrative processes to illustrate potentialities of technology.

Introduction in investments theory and practice for sustainable development

Practical assignments Answer the following questions. 1. What means investments? 2. What means efficient investments? 3. Could you exemplify an efficient investment ? 4. What is the sense of the sustainable development concept ? 5. Which is the relationship between investments, development, sustainability, production and services. References and homework documentary readings 1. Read the Sustainable Development of Romania Strategy 2000-2020. 2. Read the AGENDA 21 Document of Rio 92 Conference for Development and environment. 3. Read the law of Environment nr 137/ 1995. 4. Read the laws for stimulate investments. 5. Identify a problem from the real world concerning the necessity of sustainable investments. 6. Write a report or article for students magazine concerning these aspects. 7. Exemplify the applying knowledge aquired at this course in everyday life. 8. Make a proposal for a sustainable investment for a company in Romania.