An Industrial Collusion Against Waste

"Industrial ecology" may not be an oxymoron

One of the articles in Business On A Small Planet (IC#41)
Originally published in Summer 1995 on page 43
Copyright (c)1995, 1997 by Context Institute

Recently I had a long phone call with Ernie Lowe, who as an "industrial ecologist" works within the optimistic space of an oxymoron, reconciling the conflict between expanding industry and a fragile planet.

I like to talk with Ernie Lowe because he is not cynical about the future. He and his industrial ecology colleagues are helping design new industrial villages that mimic the sustainable exchanges in natural systems – one’s waste becomes another’s food or feedstock. (Over 90% of our extracted material ends up as waste, nine tons a year for the average US citizen.)

In "eco-industrial parks," businesses locate together to practice closed-loop recycling, including by-product exchanges between the companies to radically reduce front-end resource use and back-end waste – creating a new industrial collusion against waste.

Local Industrial Collaborations

Eco-industrial parks are in the planning stages in places like Baltimore, Rochester, Halifax Nova Scotia, Chattanooga and even the notorious Brownsville/Matamoras region along the Texas/Mexico border. These parks pull together diverse local interests to focus on taking care of the local community both economically and environmentally – expanding local jobs, incomes and tax revenue by designing for radical resource efficiencies.

An over-stressed environment like the Brownsville/Matamoras border region is getting help for the development of eco-industrial parks from a number of public and private organizations, including the Environmental Protection Agency; the Research Triangle Institute; and Ernie Lowe’s partnership, Indigo Development, as well as the Environmental Defense Fund and the Texas Natural Resources Conservation Fund.

In the Baltimore and Rochester developments, Ed Cohen-Rosenthal, with Cornell University’s Work and Environment Initiative, is promoting a focus on labor-management partnerships from the design stage on (including using union pension fund financing) to achieve the best environmental and business performance.

Ernie Lowe described the excitement that is generated in the initial meetings at the various sites. People from the diverse local organizations latch onto the ideas, brainstorm applications together, and bring back from the breaks new proposals and cooperative designs. In a place like Brownsville/Matamoras, I imagine the relief people feel shifting their economic focus from reactive to proactive, from pollution clean-up to waste elimination.

One of the parks might get its start from a new power plant, looking to sell its excess heat and other by-products. The park would then pull in a network of complementary industries – with good "fits" between their inputs and outputs. These industries would literally pool resources (exchanging by-products that were formerly regarded as waste) and discover other ways of collaborating to serve mutual interests – echoing the successes of biological evolution.

Circular Industrial Systems

Not all of this is new to industry: in the chemical industry, for example, the practice of seeing all wastes as potential by-products has been fundamental to new product development for decades. One of Ernie’s associates, Doug Holmes, describes how the various petrochemical plants and refineries sharing the Houston Ship Channel have established among themselves a cooperative network of one-to-one resource exchanges. The basic raw materials, mostly oil and gas, are brought in by pipeline, and the products mostly leave by pipeline too. The interesting twist is the hundreds of metered pipelines crossing the channel between the plants for materials exchange, moving one plant’s by-products to become another’s raw materials, saving millions of dollars of virgin material as well as the expense and risk of transportation and disposal.

The most famous industrial ecosystem for resource sharing grew up over the last 15 years in Kalundborg, Denmark, among a group of adjoining industries: Denmark’s largest coal-fired power plant, its largest refinery, a plasterboard factory, and a pharmaceutical company, as well as the city of Kalundborg, which supplied water and heat.

The power plant supplies its lower temperature steam as well as its core product – electricity – to the city, to the refinery, and to the pharmaceutical company, and some lower temperature water to a fish farm. The refinery provides excess gas (which would otherwise be flared off) to the power plant and plasterboard factory. There are a number of materials exchanges, both local and to more distant plants, such as the gypsum from the power plant’s desulfurization process providing two-thirds of the plasterboard plant’s needs. The refinery’s desulfurization process produces pure sulfur which goes to a distant sulfuric acid plant. In the most recent accounting, the companies at Kalundborg have spent approximately $60 million (US) on making the exchanges possible, and have gained a return of $120 million through cost savings and new revenues.

Parts of a Larger System

The practice of industrial ecology extends beyond the efficient sharing of energy and materials among business to new organizational and product designs. Not surprisingly, innovation in waste reduction depends on people engaged in common goals. Cornell College’s Work and Environment Initiative has been comparing national toxic release data with measures of worker participation at each facility. They are finding a direct relationship between strength of worker participation in formal environmental programs and reduction in toxic emissions, not just in one site, but nationwide.

In some countries, the very nature of a "product" is challenged. The Swiss and Germans are pioneering "product-life extension" industrial policies, in which the use of a product is sold, rather than the product itself. A company gets its profits from continuing stewardship of the things they make and through service to the user. Agfa-Gevaert has adopted this approach with its copiers; the German auto makers are moving in this direction. The products are designed to last, to be maintained, improved, and disassembled for reuse rather than bought and dumped. Business itself can then de-materialize into more and more service functions, giving further hope that "industry" and "ecology" might co-exist after all.

Elizabeth Pinchot is a consultant with Pinchot and Company, on Bainbridge Island, WA., and the co-author of the book, The End of Bureaucracy and the Rise of the Intelligent Organization.

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