Volume 4

Circular Economy,Industrial Ecology

and Short Supply Chain

Delphine GallaudBlandine Laperche

INNOVATION, ENTREPRENEURSHIP, MANAGEMENT SERIES

SMART INNOVATION SET

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Circular Economy, Industrial Ecology and Short Supply Chain

Smart Innovation Set coordinated by Dimitri Uzunidis

Volume 4

Circular Economy, Industrial Ecology and

Short Supply Chain

Delphine Gallaud Blandine Laperche

First published 2016 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address:

ISTE Ltd John Wiley & Sons, Inc. 27-37 St George’s Road 111 River Street London SW19 4EU Hoboken, NJ 07030 UK USA

www.iste.co.uk www.wiley.com

© ISTE Ltd 2016 The rights of Delphine Gallaud and Blandine Laperche to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.

Library of Congress Control Number: 2016936922 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library ISBN 978-1-84821-879-6

Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

Chapter 1. Building Region-based Sustainable Development: Vocabulary and Tools . . . . . . . . . . . . . . . . . . . . . . 1

1.1. Circular economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.1.1. The circular economy according to the MacArthur Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.1.2. Experiments in circular economy . . . . . . . . . . . . . . . . . . . . 5 1.1.3. Factual and scientific origins of circular economy . . . . . . . . . . 14

1.2. Industrial ecology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 1.2.1. Industrial ecology and sustainable development . . . . . . . . . . . . 21 1.2.2. Industrial metabolism and symbiosis . . . . . . . . . . . . . . . . . . 25 1.2.3. Experiments in industrial ecology . . . . . . . . . . . . . . . . . . . . 28

1.3. Short supply chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 1.3.1. Origins of short food supply chains: criticism of industrial “long” supply chains . . . . . . . . . . . . . . . . . . 39 1.3.2. Forms and functioning of short food supply chains . . . . . . . . . . 44 1.3.3. Short supply chains: generators of social innovation . . . . . . . . . 49

1.4. Industrial ecology, short supply chains and sustainable regional development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

1.4.1. Links among these different concepts: the creation of sustainable territories . . . . . . . . . . . . . . . . . . . . . . 51 1.4.2. Proximity and innovative “milieu”: key ingredients for sustainable regional development . . . . . . . . . . . . 55 1.4.3. An assessment of the regional impacts of industrial ecology and short supply chains . . . . . . . . . . . . . . . . . . . 59

vi Circular Economy, Industrial Ecology and Short Supply Chain

Chapter 2. Difficulties, Barriers and Stakes in Transitioning Towards Sustainable Regions . . . . . . . . . . . . . . 65

2.1. Barriers to the implementation of industrial ecology and short supply chains . . . . . . . . . . . . . . . . . . . . . . . . . . 66

2.1.1. The case of industrial ecology . . . . . . . . . . . . . . . . . . . . . . 66 2.1.2. The case of short food supply chains . . . . . . . . . . . . . . . . . . 72

2.2. How to overcome or reduce these obstacles: the role of service activities. . . . . . . . . . . . . . . . . . . . . . . 84

2.2.1. Definition of service activities . . . . . . . . . . . . . . . . . . . . . . 84 2.2.2. What role do service activities have in the implementation of industrial ecology and short food supply chains? . . . . . . . . . . . . . . . . . . . . . . . . . . 86

2.3. Challenges for public policy . . . . . . . . . . . . . . . . . . . . . . . . . . 92 2.3.1. The issue of governance . . . . . . . . . . . . . . . . . . . . . . . . . . 92 2.3.2. The issue of coordination . . . . . . . . . . . . . . . . . . . . . . . . . 96 2.3.3. What is the relevant territorial scale? . . . . . . . . . . . . . . . . . . 99

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

Preface

Circular economy, industrial ecology, short supply chains: all themes that recur frequently in economic and political discourse, associated as they are with the idea of a necessary and imminent change in modes of production and consumption, to preserve resources and the planet on which we live.

Yet, their meaning and the potential for technological, organizational and social innovation they carry remains vague. Can these concepts and new experiences in production and consumption be considered as innovations, new forms of organization and management of human activities? What is their potential, in terms of boosting economic activity? Do they herald new forms of labor organization and new social relationships? These are the questions that gave rise to the need for this book.

Very quickly, the question of territory emerged as the central issue in our reflections. Experiments in industrial ecology or the setting up of short supply chains, are often conducted in a specific territory – a conurbation, a city or a neighborhood; and it is interesting to consider the regional impacts of these new experiments. Can they contribute to the creation or perenniality of activities in these areas? Or to the creation of jobs? To the preservation of resources? If so, how? What are the difficulties and obstacles that might hinder such dynamics? What roles must public and private actors play to accelerate existing processes? These are the questions we have tried to answer in this book.

This book is the result of work carried out within the Research Network on Innovation (http://2ri.eu), whose objective is threefold: to observe and analyze processes of innovation; to build theories surrounding systems of

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innovation; and to empower research in economics and innovation management. La Cité des Sciences et de l’Industrie in Paris and the Institut CDC pour la Recherche of the Groupe Caisse des Dépôts have also contributed to the production of this book. We would like to thank Dimitri Uzunidis, President of the Research Network on Innovation, for giving us the opportunity to write this book. Thanks are also for our colleagues who participated in research programs, a part of the results of which are discussed in this book. They are, respectively. Antje Burmeister (Researcher, Ifsttar), Fedoua Kasmi (PhD student, Clersé UMR 8019, ULCO) and Celine Merlin-Brogniart (Associate Professor, Clersé UMR 8019, University of Lille 1) for the research program conducted in Dunkirk on industrial ecology in 2014–2015 (RRI, 2015)

Delphine GALLAUD Blandine LAPERCHE

March 2016

Introduction

Notwithstanding the early actions of whistle-blowers such as Rachel Carson with the publication of Silent Spring in 1962, or that of the Meadows report The Limits to Growth in 1972, awareness of the impacts of human activity, and especially production activities, on the environment is growing increasingly. The Kyoto Protocol (1992) has been the subject of 30 years of dispute and its implementation has been limited mostly by the fact that the countries responsible for generating the largest amounts of greenhouse gases (GHG) are not applying it. Public policy remains timid in the face of the challenges, emphasized by scientists, posed by climate change and its impact on human health. Consequently, governments impose few regulations on the activities of corporations, preferring to rely on approaches involving voluntary commitment and on the pressure brought to be borne by consumers against the polluting activities. Consumers, for their part, remain relatively unconcerned by these issues. With the exception of a minority of citizens committed to the actions for environmental protection or the search for an overall improvement in their quality of life, most people do not make the connection between this protection and its subsequent effects on human health. Citizen awareness has increased in the past decade, particularly in the context of the publication of the first studies demostrating the impacts of environmental degradation on increased cancer rates or on reproductive ability.

However, scientific research and concrete experiments contribute to arouse public awareness about the challenges facing society. The proliferation of concepts such as circular economy, industrial ecology and

x Circular Economy, Industrial Ecology and Short Supply Chain

short supply chains, along with concrete experiments, are giving rise to possible ways of transforming our methods of production and consumption, particularly on regional scales. Circular economy is undoubtedly the broadest of these concepts. It has been introduced as a new industrial model aimed at optimizing the use of resources and reducing or eliminating waste. Thus, circular economy is opposed to the linear model of resource consumption based on the “take, make, dispose” triptych typical of our industrial societies. There are multiple approaches and activities that use circular economy, and these vary according to the definitions and countries being considered. These include reuse, repair, recycling, functional economy, eco-design, industrial ecology, sustainable supply and responsible consumption, in other words a profusion of concepts which demonstrates that the definition of circular economy has not yet stabilized completely.

Among these activities, industrial ecology is often cited as related to circular economy. Substitution flows (in which the waste or residue from a production process becomes part of another production process) and mutualization flows (grouped purchases of materials, collections of waste, etc.) can be smoothly integrated into a strategy of reduction, reuse or recycling of waste matter. Short supply chains, which are based on the reduction of the number of intermediaries between the producer and the consumer, are sometimes referenced in broader definitions of circular economy. As a matter of fact, short supply chains are part of strategies being developed for responsible and collaborative consumption (new types of relationships between producers and consumers) and they put forward the factor of proximity, which plays a vital role in the operational implementation of circular economy on a regional scale. In this book, we have chosen to emphasize industrial ecology and short supply chains as two important components of circular economy, for two main reasons.

Industrial ecology and short supply chains share common characteristics and this the first reason that industrial ecology can be considered a form of “industrial” short supply chain [LAU 13]. When waste, residue or a sub-product of a production process is used as a primary material in another production process the number of intermediaries between the producer of the resource and the user of this resource is, in general, reduced (as compared to classic methods of supply). This is the main characteristic of a local supply chain. Industrial symbiosis could, thus, be defined as a set of industrial short

Introduction xi

supply chains. In both the approaches/models, the issue of proximity between actors is essential, leading us to our second reason.

The aim of this book is to study the contribution of the circular economy to sustainable regional development. By sustainable regional or territorial development, we mean that kind of development which, on the territorial scale, takes into account the economic, social and environmental dimensions inherent to the concept of sustainable development. The concept of sustainable development was introduced following the Brundtland Report [BRU 87], which defined it as the form of development which makes it possible to fulfill the needs of current generations without compromising the ability of future generations to fulfill their own needs. It falls at the intersection of three economic, environmental and social pillars.

Industrial ecology and short supply chains can have a territorial dimension if local actors build this one. The initiation of substitution flows (this is also true, albeit to a lesser extent, of mutualization flows) assumes geographic proximity between participants in industrial symbioses. Short supply chains can also imply this kind of proximity, even if the adjective “short” refers to the reduced number of intermediaries (as compared to classic distribution channels). The reference to territories in these two approaches (industrial ecology and short supply chains) which links them to circular economy, led us to study in detail their functioning and their possible contribution to sustainable development. How might industrial ecology and short supply chains contribute to the perenniality of activities and to the creation of new activities and subsequently new jobs? What are the difficulties and challenges existing in their operational implementation? These are the questions we have tried to answer in this book.

These points are developed in two chapters. The first examines new models that have been developed in an attempt to account for the impact of economic activities on the environment better. We then move on to a review of the definitions of circular economy, industrial ecology, and short supply chains; and examine the evolution of the meaning assigned to these concepts. We also give key examples of their operational implementation. Finally, this section shows the links that can be made between these models so as to encourage sustainable regional development. It is our belief that industrial ecology and short supply chains, considered as tools for the

xii Circular Economy, Industrial Ecology and Short Supply Chain

implementation of circular economy, can contribute to sustainable regional development via the safeguarding and/or creation of new activities, the strengthening of social relations, and the limitation/reduction of the environmental impacts of human activities. In the second chapter, we will show that their contribution to this type of development is not, however, a spontaneous process. We will discuss the limits, difficulties and challenges of implementing these development models as well as the pivotal role of public policy in overcoming difficulties and potential blocking factors.

1

Building Region-based Sustainable Development: Vocabulary and Tools

The awareness of the negative implications of human activities on the environment has gained ground recently, despite several early warnings. The definition and implementation of circular economy, industrial ecology and short supply chains, however, show a growing consciousness of the environmental impacts of economic activities; and are part of an approach aimed at developing a more sustainable model of economic development.

The common point of all these approaches is to be systemic and to take into account the set of actors concerned by various economic activities. Circular economy, industrial ecology and short supply chains rely on close and new relationships between businesses and between these businesses and the end-consumer. Circular economy seeks to move away from the linear model of industrial activity – “take, make, dispose” – so as to offer approaches that include interaction loops among actors. Industrial ecology and short supply chains can be considered as part of the conceptual and practical toolbox needed to foster the transition toward this new model of development. Finally, these approaches of industrial ecology and short supply chains are closely linked to the territory, as long as local actors build this relationship within the region by activating proximity. Successful experiments take place against the backdrop of various spatial levels depending on the projects carried out by the actors. We will pose the question of the pertinent spatial scale of these models, and show how these

Circular Economy, Industrial Ecology and Short Supply Chain, First Edition. Delphine Gallaud and Blandine Laperche.© ISTE Ltd 2016. Published by ISTE Ltd and John Wiley & Sons, Inc.