Industrial Ecology and Industrial Production: Concepts and Applications

1. Industrial Ecology and Industrial Production: Concepts and Applications Donald I. Lyons Department of Geography University of North Texas

2. Introduction: The Basic Issue Reduce Environmental Problems consumption Change the nature

3. Nature of Consumption How goods are produced consumption How goods are consumed

4. 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)

5. 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 Alternative modes of production

6. Industrial Ecology • an industrial ecosystem • mimics the material efficiency of natural ecosystems • Via 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

7. Industrial Ecology Operates at Three Levels From: Chertow, 2004

8. 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)

9. Material cycling Self organizing networks of firms Pipe-to-pipe transfers Evidence of success among primary processing industries Some evidence of networks of recycling firms in Stryia and the Ruhr But can it work where wastes are varied and diffuse Two basic models in the literature Homogeneous wastes

10. Kalundborg Industrial Ecosystem

11. Kalundborg, Denmark

12. Geographic Scale Eco-industrial parks Pipe-to-pipe engineering Evidence of success among primary processing industries Some evidence of cooperation at the level of service provision wastes that are heterogeneous and spatially diffuse? Strategies for material cycling Homogeneous wastes

13. 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

14. 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

15. 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?

16. How firms interact over space Input-output transactions Uncertainties and fluctuations Ways of communicating Extensive flows of knowledge and trust Limited flows of knowledge and trust Successful regions Unsuccessful regions

17. 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 belonging Demand for RRWT products

18. 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

19. 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)

20. 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

21. Research Design and Administration • 367 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

22. Description of Recyclable Categories

23. 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

24. 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)

25. 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)

26. 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

27. How the firms interact with each other • Most serious problems • Ensuring the purity of inputs • Maintaining a steady supplies of inputs • Technology • New technologies considered only moderately important for future growth • Knowledge flows • Most important flows are from interaction with customers (and somewhat from other firms) but not rated very highly • Knowledge flows from suppliers and trade magazines not important

28. So what does all this mean?

29. 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

30. 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

31. 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)

32. 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

33. 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

34. 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

35. 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.

36. Sustained innovation and growth? • The capacity for sustained innovation and economic growthcan 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!

37. 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.

38. 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

39. 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%

40. Central question: Examine RRWT firms to investigate ways to achieve greater degrees of material cycling within an Industrial Ecology context? Extraction Processing Manufacture Consumption Waste Remanufacture Recycling Treatment

41. 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

42. Research Methodology • From 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

43. 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

44. Firm Conventions • Most serious problems • Ensuring the purity of inputs • Maintaining a steady supplies of inputs • Technology • New techniques considered only moderately important for future growth • Knowledge flows • Most important flows are from interaction with customers (and somewhat from other firms) but not rated very highly • Knowledge flows from suppliers and trade magazines not important