Industrial Ecology and Industrial Production: Concepts and

Applications

Donald I. LyonsDepartment of GeographyUniversity of North Texas

Introduction: The Basic Issue

Environmental Problems

consumption

Reduce

Change the nature

Nature of Consumption

consumption

How goods are produced

How goods are consumed

Confronting the “efficiency” of U.S. production and consumption

93% of the materials extracted never end up in saleable products

80% of products are discarded after a single use

90% of the original materials used in the production of, or contained within, the goods made in the U.S. become waste within six weeks

For every 100 pounds of product we manufacture in the U.S. we create at least 3200 pounds of waste

(Cohen-Rosenthal, 2004)

Alternative modes of production

a new paradigm for capitalist production that

Minimizes environmental impacts from extraction, production and disposal

While retaining the essential driving mechanism of capitalism, i.e., profit

Industrial Ecology

an industrial ecosystem mimics the material efficiency of natural ecosystemsVia the optimal circulation of materials and energy

Substituting virgin materials with used materials and products (i.e., wastes) during production processes

• Extraction is minimized• Waste is minimized• Material use is maximized

Closing the loop on materials/products =minimizing the damage to the environment

Industrial Ecology Operates at Three Levels

d e s ig n fo r en v iro n m e ntp o llu tio n p re ven tion

e co -e ffic ie n cy"g ree n " a cco u n ting

F irm L e ve l

In d u s tria l sym b io s ism a te ria l c yc ling

life cyc le a n a lys isin d u s tria l se cto r in it ia t ives

A c ro ss F irm s

e n e rg y bu d g ets an d cyc lesm a te ria ls an d en e rg y f lo w s

in d u stria l m e tab o lism

R e g ion a l/G lo b a l

In d u stria l E co lo gy

From: Chertow, 2004

Material cycling

conversion of products and materials from initial use to another use:

either as a functional whole or component (remanufacturing)

As material (recycling)

Energy catalyst (waste treatment)

Two basic models in the literature

Evidence of success among primary processing industries

Pipe-to-pipe transfers

But can it work where wastes are varied and diffuse

Some evidence of networks of recycling firms in Stryia and the Ruhr

Self organizing networks of firms

Material cycling

Homogeneous wastes

Kalundborg Industrial Ecosystem

Kalundborg, Denmark Industrial Symbiosis of Kalundborg DenmarkIndustrial Symbiosis of Kalundborg Denmark

Liquid Fertilizer Production

StatoilRefinery

Energy E2 PowerStation

Novo Nordisk/ Novozymes A/SPharmaceuticals

Farms

LakeTissø

Cement;roads

Fishfarming

Gyproc Nordic EastWall-board

Plant

Water

Water

Water

Sludge(treated)

Heat

ScrubberSludge

Stea

m

Boile

rw

ater

Coo

ling

wat

er

Stea

m

Recovered nickel and vanadium

A-S SoilremH

otw

ater

Municipality ofKalundborg

District Heating

Wastewater Treatment Plant

Sulfur

Org

anic

re

sidu

es

Fly ash

Heat

Slud

ge

Gas (back up)

Yeastslurry

Was

tew

ater

Strategies for material cycling

Evidence of success among primary processing industries

Pipe-to-pipe engineering

wastes that are heterogeneous and spatially diffuse?

Some evidence of cooperation at the level of service provision

Eco-industrial parks

Geographic Scale

Homogeneous wastes

Heterogeneous Wastes

Characterized by a high degree of heterogeneity Widely dispersed

May need aggregation

Require minimum thresholds (i.e., minimum volume of input)

May need to be reconstituted

May be sold in different market segments

Highly sensitive to transport costs

Basic geographic questions

Where in the settlement hierarchy?

• Possible spatial scales?– Village—town—metropolitan area—region—country

What’s the spatial range of market hinterlands? • Possible spatial scales?

– individual plant—industrial park—corporation

– Town—metropolitan area—region—country

Cultural-economic context

What is the cultural-economic context within which material cycling can occur?

How would the firms communicate with each other?

Perception of the value of the firms within the local community?

How firms interact over spaceInput-output transactions

Uncertainties and fluctuations

Ways of communicating

Successful regions Unsuccessful regions

Extensive flows of knowledge and trust Limited flows of knowledge and trust

How firms are perceived in their

localities Supportive milieu leads to successful firms and regions

Business Public/business

Material Support:Local financial institutions (capital)

Government agencies (applied science)Other firms (knowledge, markets)

Cultural Support:Sense of worth and belongingDemand for RRWT products

How can we test some of these ideas?

Firms that currently engaged in:recycling

remanufacturing

waste treatment

are experts are profitably coordinating waste conversion from initial to another use

History of Recycling, remanufacturing and waste treatment firms

A viable scrap recycling industry has existed since the middle of the 19th century

56,061 recycling and remanufacturing firms in the US, employing over 1.1 million (Beck, Inc. 2001)

Over 2 million employees in 2001 (Andrews and Maurer, 2001)

A caution!

Not a panacea

Face technological, environmental and economic limitations

• Can substantially reduce the ultimate volume of waste

• Reduce demand for virgin raw materials

• Reduce costs of disposal

Research Design and Administration367 firms we identified from the State of Texas’ Commission on Environmental Quality’s Material Exchange Website

• A Material Exchange is essentially a business directory for firms or other entities dealing with wastes, recyclables and used goods

Modified Total Design Method (mail survey technique)• A technique developed by Dillman (1978, 2002)

• Response Rate:

– 367 questionnaires sent out

– 80 returned by U.S. Postal Service

– 17 had no physical location in Texas

– 103 were returned

– = response rate of 38 percent

Description of Recyclable Categories

Recycling 60% Main elements

Scrap metals 28% Iron, steel, aluminum etc

Diversionary 18% aluminum cans, paper, PET and HDPE bottles, and glass

Paper 5% Paper, all types

Niche 10% precious metals, oil, food, grease, construction fill

Remanufacturers 33%

Compost 12% Compost

Niche core 7% wood pallets, industrial reels, textiles, furniture

Electronic core 6% e.g., toner cartridges, printer ribbons

Plastic 5% garden decks, primary compounds

Paper 4% industrial packaging, paperboard, boxes

Waste treatment 7% Hazardous, non-hazardous industrial and municipal waste

Basic characteristics of the firms Recycling firms

• mostly small, Texas based, family owned, and old

Remanufacturers• Somewhat larger, mostly Texas owned, and young

Waste treatment firms • somewhat larger, more corporate and young

Overall, mostly small Texas based firms with a scattering of larger corporations

Position in the settlement hierarchy

Firms are found throughout the settlement hierarchy

Over ½ in the 4 large metro’s• (about 10% smaller proportion than total manufacturing)

Another ¼ in the 21 smaller metro’s (e.g., Lubbock)

• ( about 4% smaller proportion than total manufacturing)

Final ¼ in rural areas• (7% larger proportion than total manufacturing)

Spatial Range of Market hinterlands

3 types of hinterland structure

Locally clustered (compost, niche and electronic cores)• Local inputs exceed 75%; (commercial)• over 50% of outputs to local area (commercial)

Export oriented (scrap, diversionary, paper)• Local inputs exceed 75%; (municipal)• Less than 25% outputs to local area (primary markets, e.g., mills)

Multi-scale clustered (waste treatment, niche recycling)• similar levels of inputs and outputs • at local, regional and national levels; (markets vary)

Local perception of the firms

Most difficult issues:local negative perception

Convincing the local economic development community of their significance

Less difficult issues:Expansion capital available

Markets for outputs available

No perceived problems with unfair tax subsidies to virgin producers

How the firms interact with each other

Most serious problemsEnsuring the purity of inputsMaintaining a steady supplies of inputs

TechnologyNew technologies considered only moderately important for future growth

Knowledge flowsMost important flows are from interaction with customers (and somewhat from other firms) but not rated very highlyKnowledge flows from suppliers and trade magazines not important

So what does all this mean?

Settlement hierarchy

Firms are located throughout the hierarchy

somewhat higher concentration (than manufacturing) at the lower end of the settlement hierarchy

Why?• Most are highly sensitive to transport costs

– limits the market areas of any individual firm allowing more firms to operate at lower levels of the hierarchy

• Unique pricing structure– Most firms receive their highest proportion of inputs free, thus allowing

them to operate at lower thresholds (volume)– and at lower levels of the hierarchy

Suggesting,

These firms are ubiquitous in the market place

But, the high proportion of free inputs • suggests they are somewhat marginal to the larger economy

Still, its encouraging that profitable cycling can take place at a variety of settlement scales

Market hinterlands

Firms are structured around three hinterland types

Although all firms had high levels of local input

Geography of outputs is more diverse

We cannot assign the spatial structure of cycling to any one spatial scale

• Nor can we conceive of cycling in terms of monolithic networks bounded in space or place with internal flows (e.g., the Kalundborg model)

The export group

The locally clustered group may be the “ideal type”.It is unlikely that the export oriented group could be structured similarly

• Dominant spatial economic logic is driven by the need to be close to their inputs—same as other primary processors (e.g., paper mills)

Their outputs flow to large integrated primary processing facilities • so, only the largest cycling flows are likely to influence their location

Even with the smaller mini-mills (e.g., steel) certain minimum volumes will be necessary

• Flows beyond input regions will always occur for this group

Local perception of the firms

Firms’ perception of negative attitudes At the very least, this is likely to slow the entry of new firms to the sector

Fewer problems with day-to-day operations

Modifying negative perceptions will require fundamental changes in the culture of capitalist consumption

• Greater emphasis on “function purchasing” as opposed to “product purchasing” may prove useful here

How the firms interact

Input purity and steady supply problems

This may make it more difficult for the types of communications necessary (high levels of trust and knowledge flows) for innovations and strong growth to emerge

3rd party quality standards would help to ensure purity • May also provide a framework within which higher levels of trust,

and knowledge flows may emerge

Conclusion 3: firm conventions (cont)

Limited importance of new technologies and the limited flows of information

Basic ingredients (e.g., need for problem solving) necessary for high rates of innovation are not present

Problem lies with the technologies and systems used in the design, production and use of products

These firms compete within production systems not designed to process their outputs.

Sustained innovation and growth?

The capacity for sustained innovation and economic growth can only occur when,

Business and society began to seriously ask how can we integrate cycling in the fundamental processes of production and consumption

This will provide:• opportunity to solve newly emerging problems

• And the development of new market niches

i.e., demand!

Sustained innovation and growth?

To some extent this has always occurred

Few of these firms are motivated by environmental concerns, the majority are motivated by profit

• And, ultimately, all who survive must be concerned by profit

At the same time, it is unlikely that they can become central players until we begin to think about fundamental changes in the way we produce and consume products.

Recycling Rates

Rates vary enormously and are difficult to estimate accurately since most non-hazardous waste is not accounted for by Government Agencies

Municipal Rates are about 30% • (But actual volume of waste continues to increase because we generate more waste every

year)

Rates by broad material category

Aluminum about 35-40 percent• 50% of post consumer aluminum is from cans

Iron about 64%• 95% for automobiles and construction beams• 84 % for appliances• 58 % for steel cans• 40 % for rebar and other materials

Recycling Rates (cont.)

Glass about 37%• (almost all is soda-lime-silica, special glass is not recycled due to

varying composition)

Plastics • Varies widely due to competition from virgin producers

– PET and HDPE about 22.5%– (soda and water containers, toys, plastic bags, detergent

bottles, milk bottles, plastic bags)– PVC, LDPE/LLDPE, PP, PS ABOUT 0.5% to 5.0%

Rubber about 4 percent

Paper• About 35%

Extraction Processing Manufacture Consumption Waste

Recycling RemanufactureTreatment

Central question: Examine RRWT firms to investigate ways to achieve greater degrees of material cycling within an Industrial Ecology context?

To begin to answer this question:

We will examine three dimensions of firm interaction:

Firm territorial economy

Firm conventions, and

The local cultural context within which firms operate

Research MethodologyFrom the results of a questionnaire survey of a set of RRWT firms in Texas, we frame the answer in three ways:

Analyze the territorial economy of input-output linkages to assess the extent to which they are constructed locally

Examine elements of the local cultural environment to see if it is conducive to success

Identify the nature of firm conventions to see if they are favorable toward innovation and economic growth

Territorial Economy of the firms

Inputs Processing Outputs

The spatial extent of this interaction constitutes the firms territorial economy and is analogous to the spatial manifestation of their industrial symbiosis potential

Firm Conventions

Most serious problemsEnsuring the purity of inputsMaintaining a steady supplies of inputs

TechnologyNew techniques considered only moderately important for future growth

Knowledge flowsMost important flows are from interaction with customers (and somewhat from other firms) but not rated very highlyKnowledge flows from suppliers and trade magazines not important