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Applying Industrial Ecology An exploration of how its different streams can be used in business organizations

Alpha lest releare January 19, 1993

A report from the 'Change Management Center 6757 Thomhill Dr., Oakland, CA 94611 510-339-1090 voice/fax Internet: elowe@path.net, Emnet or AOL: elowe, Compuserve: 72537,1454

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Credits Ernest Lowe coordinated the writing and compilation of this report with contributions from Scott Butner (to Industrial Metabolism section), Faye Duchin (Structural Economics), Laurence Evans (Modeling on Ecosystems), Gil Friend (Modeling on Ecosystems and Feedback for Self-regulation), and Jill Watz (Industrial Metabolism 1

copyright 1993 Change Management Center, Oakland, CA

Applying Industrial Ecology 1

Contents

1 Introduction The Context

2 Modeling industrial systems on ecosystems 5 Industrial Metabolism 8 Structural economics and dynamic

input/output modeling 1 1 Design for Environment 13 Management of the interface between

industry and natural systems Feedback for self-regulation

15 Bibliography

Introduction

Industrial Ecology is one of several frameworks for charting a path to sustainable development. It is simultaneously grounded in industrial technology and ecological understanding. The various streams of development in this field are whole systems approaches to the analysis and design of the industnal world. They offer means to dramatically reverse the destructive impact of this world on the biosphere and at the same time create substantial economic benefits. This report is a summary of the field, emphasizing how the streams of industrial ecology can be applied in business organizations, and assessing likely benefits and challenges in doing so. Perhaps the greatest overall benefit these methods offer is a systemic framework

to bring order to the now confusing and piecemeal task of environmental management; to connect environmental management fully into the business side of organizations.

This is an early release of the document designed to test the ideas our team has gathered and created. We invite you to join this process of discovering industrial ecology: challenge our thinking, test it in your organizations, and let us know'wnat you learn. Discovering Industrial Ecology, the paper by CMC's Director, Ernest Lowe, gives a general introduction to this work and its relationship to sustainable development and other realms of corporate change. The other valuable survey paper is Hardin Tibb's, Industrial Ecology.

The context for industrial ecology

The man-made world is designed, managed, modeled and changed by several major frameworks for thinking (manifested both as business functions and academic disciplines). In all of these frameworks a cutting edge is seeking to chart a path to sustainable development.

Economics: Ecological Economics; Accounting: Green accounting/auditing; Business Management: the Sustainable Corporation & Strategic Environmental Management; Public policy: Green planning to create regulation and incentives for sustainable development: Engineering: Industrial ecology.

The different facets of this cutting edge are converging upon an ecological world view. As cross- disciplinary work in both business and academic organizations grows, this convergence will create the theory and practice of sustainable development. These five fields will need support from psychology, anthropology, and sociology to achieve the personal, institutional and societal transformation required.

Industrial ecology: the streams of deveiopment ~

1. Modeling industrial systems on ecosystems: Using principles and understandings of ecology in design of industrial systems; Designing industrial ecosystems -- multi-linear recycling of materials a t an industrial site;

2. Industrial metabolism -- seeing materials and energy flows from biosphere through the industrial system back to the biosphere. 3. Structural economics and dynamic inputloutput modeling -- seeing the impacts of webs of technological change on economies, industries and ecosystems. 4. Design for environment - enabling design of facilities, processes, products, and services with awareness of both ecological and economic costshenefits across whole life cycle. 5. Management of the interface between industry and natural systems

Matching the inputs and outputs of the manmade world to the constraints of the biosphere.

Environmental information systems enabling feedback loops for self-regulation and enviro- management, with real time response.

Common theme: these streams come together in a holistic, systemic mode of perception and action. They are complementary and are likely to be highly synergistic when applied together. Futthermore, there is an intrinsic linkage between industrial ecology and the methods of organizational design flowing from general systems theory.

6. Feedback for self-regulation

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2'. Applying Industrial Ecology: Modeling on Ecosystems

1. Modeling industrialhushes systems on ecosystems

With contributions from Gil Friend and Laurence Evans

Summary of the field Throughout human history designers have used natural systems as inspiration for their artifacts. Even in the high tech era the heat-seeking Sidewinder Missile draws upon the rattlesnake's heat sensing organ; study of dragonfly's hovering mechanisms were used to correct certain aspects of helicopter design. Beginning in the 1970s designers started to call for a larger vision of this mimicking of nature (biomimesis). Victor Papanek's Design for the Real World, for instance, called for systemic level of modeling upon

" . . . study basic principles in nature and emerge with applications of principles and processes to the needs of mankind . . . concemed not so much with the form of parts or the shape of things, but rather, with the possibilities of examining how nature makes things happen, the interrelation of parts, the existence of systems." (Papanek, 1973) This theme is central to the vision of industrial ecology. Unfortunately relatively few researchers have built upon this concept of design by analogy and metaphor informed by ecological understanding. Perhaps too few have the necessary understanding. One author puts it this way: "The metaphor of the ecosystem holds a special potential. Ecosystems, in their five billion year process of evolution and survival, have become the planet's greatest repository of wisdom about efficiency, adaptation, competition and sustainability. Why reinvent the wheel, when the R&D has already been done? "Look out your window . . . Or remember the last time you visited a nearby river or bay. Every feature of these living systems, natural or managed, is paralled by features of your company, and in turn by features of the industrial ecosystem in which your company 'lives'. What are these parallels, what can we learn from them?" (Friend, 1993) This approach can help designers of industrial and service systems improve everything from environmental management and manufacturing process to strategic planning. In the process the value of organizational resilience (basic to the design of ecosystems) will complement traditional values of efficiency and profitability. (Design for Environment is a distinct stream because its whole systems tools do not draw directly on the ecosystem metaphor. 1 An induEtrial ecosystem When we apply industrial ecology to relationships among companies it becomes even more powerful. The ultimate goal of industrial ecology is bringing the industrial system as close as possible to being a closed loop system, with near complete recycling of al l materials (echoing ecological design).

_ _ natural systems: -.

Environmental executives at companies like Xerox, Monsanto, and 3M are beginning t o see the need for such high targets as 0 emissions and 0 wastes, an extension of TQM programs going for 0 defects. Two GM R&D executives suggest the potential of this idea: ", , . the traditional model of industrial activity -- in which individual manufacturing processes take in raw materials and generate products to b e sold plus waste to be disposed of -- should be transformed into a more integrated model: an industrial ecosystem. In such a system the consumption of energy and materials is optimized, waste generation is minimized and the effluents of one process -- whether they are spent catalysts from petroleum refining, fly and bottom ash from electric-power generation or discarded plastic containers from consumer products - serve as the raw material for another process." (Frosch & Gallopolocrs, 71 989) An operating industrial ecosystem modeling healthy interaction between business and the environment can be found in Kalundborg, Denmark. Here a web of multidimensional recycling has developed between an electric power generating plant, an oil refinery, a biotechnology production plant, a plasterboard factory, a sulfuric acid producer, cement producers, local agriculture and horticulture, and district heating utilities. In this man-made ecosystem, water, energy (for both heating and cooling), chemicals, and organic materials flow from one company to another. Air, water and ground pollution is decreased, water and other resources are conserved, and 'waste' materials generate revenue streams. As an added bonus, the power plant profits from a fish farm which plays an important part in the recycling processes. (Tibbs,

Ebbs says, "None of the examples of cooperation a t Kalundborg was specifically required by regulation, and . . . each exchange or trade is negotiated independently." Initially the companies were just doing business in these exchanges, but they soon noticed the environmental implications. One major business trend is increased partnering between businesses, their customers and their vendors. This partnering is supported by electronic data interchange (ED11 among them. Regional business groups are also interested in enhancing interaction among local companies and plants. There are a number of regional and national waste exchange data bases. These changes already in motion provide a fertile ground for testing industrial ecology practice. By building on such momentum, we may see the emergence of many industrial ecosystems in the style of Kalundborg. Such changes would contribute to the transformation in the industrial system demanded by the global environmental crisis.

1991, pp. 6-8)

3 Applying rnaustriai Ecorogy: Modeling on Ecosystems

CChC is working with an international team developing design of a prototype eco-industrial park, created in the industrial ecology framework. Contact us for information. -- E.L.) Process of application Applying ecological understanding to the industrial system can take many different forms. 1. A possible beginning is to familiarize yourself with ecosystem dynamics common to any ecosystem.

Diagram the flows of energy and cycles of materials through a familiar local natural ecosystem. Do the same for your individual facility. For your company as a whole. For your industrial region. Look a t an entire production cycle as an ecosystem or set of ecosystems functioning over time. Where can you find oppomnities to "do more with less"? For example, by closing loops between inputs and outputs, "stacking functions" by making components and processes multi-purpose, or shifting from capital-energy like fossil fuels to income-energy like solar, wind or biomass?

2. Another approach is to focus on a specific business challenge and explore how its analogue would be managed in an ecosystem. For instance, design of an industrial recycling system could draw upon natural recycling processes in an appropriate ecosystem.

Each waste stream represents a resource "niche", to be exploited by a particular 'organism' (product), or perhaps contributing, through the actions of 'detritivores' (transformation processes), to future productivity. How can you match wastes with potential resources, either within your facility/firm or across boundaries? What multiple linkages can you design into such matches? How do specific recycling strategies in natural ecosystems suggest new approaches in your situation?

Another example, the stress of a budget crunch might be seen as analogous to a the stress of a drought in an ecosystem. Here adaptive- behaviors could include:

Reduce demand for input (organisms may reduce need for both water and nutrients in a 'down time'); Vary inputs from normal (diet may alter to accommodate decrease in usual nutrients); Migration in search of missing resources; Death of organisms (downsizing!) comes only after other adaptations have run their course.

3. Consider the ecologist C.S. Hollings' criteria for system resilience -- an important quality in this era of rapid and sometimes unprecedented change: dispersion; numerical redundancy; functional redundancy; optimal interconnection; flexibility; modularity; internal buffering; technical simplicity and forgivingness; and ease of reproduction. f Holling 1 9781.

How well does your company meet these criteria for resilience? What can it learn and adapt from resilient natural ecosystems to increase its own resilience? (What can it do to reduce its own impact on the resilience of the ecosystems that receive its outputs?)

4. Select an ecological setting with rich interactions and use it as a metaphor to learn from in looking a t an industrial system.

For example, what differences would you identify between a grassland ecosystem such as the Serengetti compared with private and public Western U.S. grasslands with range catde? What can you observe or infer about diversity, stability, productivity and resilience in these systems.

5. Consider a design task where you're "stuck." Look at the problem through the ecosystem model, and through an industrial model. What insights does each offer? 6.Evaluate strategies by exploring how they would play out in an ecosystem.

Population growth in an ecosystem may proceed exponentially for a while, but eventually will either stabilize or crash. Yet 'the market expects companies to grow endlessly. How can these worlds be reconciled? Or, How can an ecologically sensitive company thrive in a market system that emphasizes growth as a primary value?

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Who is involved Anyone from the production line to the board. Industrial engineers, facilities designers, environmental managers, strategic planners ... . Ecologists, people engaged in sustainable agriculture, aquaculture, or other businesses with a strong natural systems foundation. (As coaches for industrial and service organizational designers.)

Benefits Nature operates a highly efficient factory whose history goes back 3.5 billion years. Potential benefits of modeling on ecosystems include new cost savings and gains in productivity, greater efficiency in use of materials and energy, increased sophistication in achieving multiple benefits from each investment or process combined with more benign and beneficial interaction with the biosphere. (Of course nature's 'efficiency' may be more evident at the level of the ecosystem than the organism. It may have more to do with long term optimization, resilience and adaptability than the short-term maximization common to companies and wired-into individual organisms.) Designing industry with guidance from the operation of ecosystems is synergistic with other aspects of systems thinking that are vital to managing complex business organizations -- management cybernetics, systems dynamics, sociotechnical systems, etc..

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4 ' Applying Industrial Ecology: Modeling on Ecosystems

Employee motivation IS likely to be enhanced by applying ecological understanding to enhancing environmental performance. This process appears to strike a deeply responsive chord. This approach acknowledges the basic truth that the manmade world is a natural part of the biosphere and must be designed and managed in terms of this truth. No other point of view is sufficient for long-term sustainability.

Possible challengedobstacles Accounting systems are sensitive only to monetized values; not all measures of ecological well-being can (or should) be translated into the language of accounting. On the other hand, only measures that show up "on the books' will be permanently incorporated into the decision framework of a company. So industrial ecologists must work closely

Knowledge base -- While the science of ecology is rich, the study of industrial metabolism is relatively young, and experience of rigorously aDplying this approach is still thin. Much of the research will be done by practitioners in business . . . and the practitioners will need a certain courage.

Where has it been applied? (See the Kalundborg story above.) Organic and sustainable agriculture (including some large scale operations) Bionic and biomorphic design, usually of specific products, indicate the power of connecting design of man-made systems back to natural systems, i.e. the cybernetics at the heart of computer design emerged from the study of common features between organic nervous systems and machine control systems. Examples of ecosystem principles applied in industrial setting: "Concentrated toxins are not stored or transported. ' Example: AT&T is piloting online production of Gallium arsenide for computer chips from a chemical precursor instead of shipping this extremely toxic chemical. "The natural system is dynamic and information- driven and the identity of ecosystem players is defined in process terms.' Example: Integrated Resource Management company in Boston has its PC in the office linked real time to the production line of clients. "When they want to make a line change they call us and we tell them what energy requirements will be for the new line setup. We're linked to real time sensors on their lines." "Each member of an ecosystem performs multiple functions . . , Example: SunTrain -- a start-up company doing integrated transportation development -- will create a one-call traveler information and booking service. The information gathered will serve customers, assist design of routes, , shape marketing and yield data products. The whole system design of SunTrain

._ with economists and accountants.

contains many examples of industrial ecology thinking.

The ecosystem metaphor can only go so far! In ecosystems the 'planning function' is distributed, self-organizing, unconcious, and long-term (except in catastrophe). There's no central 'brain' controlling things. We need to also apply systemic models reflecting the uniqueness of human consciousness to deal with our present challenge of redesigning the manmade world. General systems theory and cybernetics grew from the search for principles bridging natural, human and technical systems. This work laid the foundation for organizational design frameworks like systems dynamics, The Viable System Model, SocioTechnical Systems, the leaming organization, and self-managing work teams. All are vital components of the organizational transforrxzion to sustainability.

- dppiying industrial Ecology: inuustrial Metabolism 3

hhustrial Metabolism

With contributions from R.S. Butner, Banelle Inst, Pacific Northwest Labs and Rob Axtell, Brookings Inst. "The metabolism of industry is the whole integrated collection of physical processes that convert raw materials and energy, plus labor, into finished products and wastes into a more or less steady-state condition . . . the economic system is, in essence, the metabolic regulatory mechanism." (Ayres & Simoni ch 11

Summary of the field Industrial metabolism - seeing materials and energy flows from the ecosphere through the industrial system and back to the ecosphere. Robert Ayres, professor of engineering and policy a t Carnegie-Mellon (until 1 992) started developing one of the earliest streams of industrial ecology work beginning in the '70s: industrial metabolism. He outlined a method of systemic analysis of materials flows in the industrial system, from initial extraction of resources through to final disposal of wastes. This method can be applied globally, nationally, by industry, by company and by site. Regional application gives valuable insight into sustainability of natural units such as watersheds or atmospheric basins. The sources and sinks in a region can be readily mapped as a basis for public and corporate action. Industrial metabolism parallels product life cycle analysis and was a precursor to it. IM provides data and relationships on materials cycles needed to do adequate product or process analysis. This method provides a 'unified, comprehensive view of production and consumption processes and their effects on the environment. It entails a systematic analysis of all sources of a given material, its pathways through the industrial economy,and the mechanisms by which it is transformed into outputs to be absorbed and processed by the environment." (Stigliani & Anderberg) Industrial metabolism ana1yci-s hiahlights the dramatic difference between natural and industrial metabolic processes: in natural systems materials flow in closed loops with near universal recycling; industrial systems are very dissipative, leading to materials concentrations too low to provide value but high enough to pollute. In these terms, an inclusive definition of waste would be: dissipative use of natural resources.

Process of application I . Study of industrial metabolism of toxic mate- Build a model of the system in question incorporating the following components:

Define system and sub-system boundaries to determine when materials actually enter or leave the system in focus: (this system definition is both spatial and temporal. (See note by Scott Butner below.)

Identify sources of emissions for materials being studied. Include al l point and diffuse sources along cycle from extraction through refining, manufacturing, and use, to disposal. Estimate quantities of emissions to air, water, and soil for each source. Track emissions through the industrial economy to final deposition in soils or surface waters. Analyze policy options in light of this whole systems view. The most imponant tracking that needs to take place from a policy standpoint is probably the concentration and chemical availability of the material. Materials that are dissipated (i.e., lost in low concentration streams or low energy forms that have no economic value and need large infusions of energy to be "replenished") are likely to be released to the environment and are intrinsically wasteful uses.

2. Shrdy of industrid mttabolism of a plant or company: Build a systems model of materials/energy flows through a plant or company. (The study might focus on materialdenergy needs that are diminishing natural resources, ones in which wastage appears to be unnecessarily high, or other strategically important flows. )

Define system and sub-system boundaries to determine when materials actually enter or leave the system in focus; (this system definition is both spatial and temporal. See note by Scott Butner below.) Inventory all process and product materials. Identify sources of all materials, energy costs of extraction and processing, and emissions generated. Analyze materials flow. Calculate virgin/recycled materials ratio. Calculate per cent of materials going into product, into recycling (internal or enernall, into emissions, and dumps. Estimate costs of wastes. Analyze emissions.

Identify sources of emissions for pollutants. Include all point and diffuse sources along cycle from extraction through refining, manufacturing, and use, tu disposal.

Estimate quantities of emissions to air, water, and soil for each source. Track emissions through the plant/company to final deposition in soils or surface waters. Estimate total cost of emissions, hidden and outfront. Develop scenarios for improving performance in the context of this whole systems analysis. Determine most effective program for change and set targets.

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6' . Applying Industrial Ecology: Industrial Metabolism

3. Some pnncipbs for improving the metabolic pathwqvs of industrial processes and mate&& use: Reduce dissipative uses of materials through change in product design, enhancement of re-use, recyciing; (dissipative use = where materials are degraded, dispersed, and lost in the course of usage.)

Change product design to eliminate toxic materials from being dissipated into the environment as a factor of use. Reduce the number of steps in processes to achieve greater energy and resource efficiencies; Create on-site, on-demand production of hazardous reagents;

Achieve overall system efficiencies as a cooperative effort; Emulate biological metabolism -- temperature and pressure, cyclic processes.

- - (Industrial metabolism is basically more analytic than prescriptive, defining the problem of resource dissipation in thermodynamic terms. The main "lesson" is that any release to the environment in dissipative form (i.e., too dilute or chemically locked up to be of economic value) is non-sustainable, because it moves material "out of reach" of the industrial cycles that depend on it. Such dissipative use, because it involves NET material fluxes from one state to a lower quality state, are inherently unstable and non-sustainable. Beyond that, we have to look to IE for lessons on how natural systems have evolved to work around that problem.)

4. Some measures of suslairucbility Nrn indushial mCtab0ii.W The ratio of virgin to recycled materials: "The fraction of current metal supply needed to replace dissipative losses L e . production from virgin ores needed to maintain a stable level of consumption) is thus a useful surrogate measure of 'distance' from a steady- state condition, Le. a condition of long-run sustainability. " Ratio of actual/potential recycled materials: " Wrth regard to materials that are potentially recyclable the fraction actual recycled is a useful measure of the approach toward (or away from) sustainability. A reasonable proxy for this, in the case of metals, is the ratio of secondary supply to total supply of final materials. . . the recycling ratio in the United States has been rising consistently in recent years only for lead and ironkteel. Materials productivity: "Another useful measure of industrial metabolic efficiency is the economic output per unit of material input (not reliable for economy as a whole). (Ayres & Simonis, Ch 1)

An appmach to system definition Scott Butner's process of system definition for reconstructing material balances around industrial facilities, given the limitations of real-life data collection and record management: I employ the concept of an "information boundary" around the process that forms the true process envelope -- the information boundary consists of a set

of points in the process where material movements are measured; ie., through direct measurement, through accounting systems, or through indirect measurement (eg., proportional to work flow, etc). The other important concept is the idea of a temporal boundary around the process -- that IS, taking into account that some process "flows" are periodic, rather than continuous and each process has a characteristic time period (ranging from minutes to months) that represents the smallest increment of time over which meaningful measurements can be made of material flows. Industrial metabolism and structural economics with its input-output models are closely linked. The 1-0 models are one of the most powerful ways of applying IM thinking.

Who is involved Executive team . _ _ r;

Environmental management Procurement Manufacturing Industrial engineering Information systems

Benefits This method enables users to better determine true costs of materials, factoring in the real value of nonrenewable resources and environmental pollution. This analysis helps give an economic value in the market and the balance sheet of companies to what economists call "externalities". "The industrial metabolism perspective is essentially 'holistic' in that the whole range of interactions between energy, materials and the environment are considered together . . . it is much easier to see that narrowly conceived or shon-run (myopic) 'quick fix' policies may be very far from globally optimum. In fact, from the larger perspective, many such policies may be positively harmful. An example: environmental regulations on emissions by medium and point sources result in transfer from polluting air to water or land ". . . narrowly conceived environmental policies over the past twenty years and more have largely shifted waste emissions from one form (and medium) to another, without significantly reducing the totals." (Ayres & Simonis, c h l ) IM provides a logical, semi-quar.-?ative and disciplined means of assessing b -stainability within a sub-set of the economy, such as . I individual firm, which is often difficult to measure -!rice sustainability only has meaning within closed 0. ?mi-closed systems (i.e., an ecosystem, a wa -shed, a planet). For a company, analysis of its induarrial metabolism as a whole or at specific facilities provides a holistic view to guide internal policies and work with external regulators and other environmental stakeholders. For example, an IM study of heavy metals pollution in a plant and in the larger region surrounding the facility could discover that the plant's controls and recycling have reduced its point sources to a low level compared with the non-point sources distributed

r4opIying maustrial Ecology: Industrial Metabolism 7 -

thro'ugn the region. The study would pinpoint areas where plant performance could still be improved. But priority for public policy-making would be developing an effective program for dealing with the non-point sources through communjty education, infrastructure, management of government services, and the like. An internal IM study might explore an issue like the balance between virgin and recycled materials use, developing a model of materials use, industrial processes, and both environmental and economic cosrs/benefits. This would enable decision-makers to evaluate scenarios for change to decrease use of virgin materials. Industrial metabolism studies couid play a vital role in regional economic development planning, in both developed and developing countries.

Challengedobstacles Data needed for full analysis may not be available. (IM often requires extrapolation from existing data.) Processes for applying IM need more development for use in corporate setting. Need for accelerated R&D to develop uses for waste materials now seen as unusable in the quantities generated -- nitric acid, sulfur oxides, lignin wastes, etc. Fly-ash from coal (50M tons in U.S. alone) for instance, is a potential 'ore' for iron, aluminum and silicon, can be used as a supplement to porttand cement, or as a medium for disposal of toxic liquid wastes. "In this 'ecological perspective', a separate and necessary (but not sufficient) condition for sustainability is the maintenance of an adequate 'environmental resource endowment" -- the environmental assets necessary to provide needed and wanted environmental services, The most critical environmental services include the basic conditions of life-support on the earth, namely climate stabilization (temperature, rainfall, etc.), food supply (the 'food chain'), and biological waste disposal and materials recycling. It is noteworthy that climatic stability, moderate temperatures, the stratospheric ozone layer, the carbon-oxygen cycle, the nitrogen cycle, the hydrological cycle, mature 'old growth' forests (temperate or tropical), soil f td i l ty and bio-diversity are not technologically replaceable (or repairable) to any meaningful degree, at least for the planet as a whole." (Ayres, 1991, SEI Conf.) "Many materials uses are inherently dissipative. the materials are degraded, dispersed and lost in the course of a single normal usage . . . (including) food and fuels, packaging materials, lubricants, solvents, flocculants, anti-freezes, detergents, soaps, bleaches and cleaning agents, dyes, paints and pigments, most paper, cosmetics, pharmaceuticals, fertilizers, pesticides, herbicides and germicides . . . Except for food and fuel, most such uses are non-essential in that technologies could be developed to eliminate the need for them. (Ayres Externalities1 12

Where has GM been applied? Industrial metabolism analysis was applied by Robert Ayres to a study of environmental problems in the

aluminum industry. (Ayres, 1978) This study focused on fluorine and the emission of gaseous fluorides from smelters. Studies of specific materials, tracing their passage through the industrial system, include ones on bromine, chlorine, sulfur, nitrogen (Ayres et al in IASSA publication, 1 989) cadmium, chromium, arsenic, copper, lead, mercury, silver, and zinc (Ayres e t a1 1985). The Rhine Basin Study conducted by the International Institute for Applied Systems Analysis (Laxenberg, Austria) is the largest application of industrial metabolism methods of analysis. This study examines sources of pollution and pathways by which pollutants end up in the river for the whole basin. Materials studied include cadmium, lead, zinc, lindane, PCBS, nitrogen and phosphorous. Time frame is from 1950 to 201 0.

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8 . I Applying Industrial Ecology: Structural Economics

Structural Economics and Dynamic Input-Output Modeling

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seeing the impacts of webs of technological change on economies, indunzics companies, and ecosystems With contributions from Faye Duchin.

Summary of the field Faye Duchin, Director of NYU's Institute of Economic Analysis, has built upon the technical work in industrial metabolism of Roben Ayres, with sophisticated models from structural economics. (Her foundation in economics is the Nobel prize work of Wassily Leontief on Input-Output models of the exchanges among industries.) Professor Duchin's work provides "an analytic framework for considering the economic implications of complex webs of technical changes . . . Dynamic

. - input-output models are used to develop a set of possible solutions rather than a single optimal one . . . (making it) possible to experiment with changes in input structures that might reduce water usage in production, for instance, or recover products of economic value . . . A more complex set of results, involving economic and environmental trade-offs, can be evaluated." "Structural economics emphasizes the representation of stocks and flows, measured in physical units, as well as associated costs and prices . . . The variables representing such physical measures (like tons of steel or tons of carbon emissions), unlike variables that are essentially symbolic or index numbers, provide a direct link to technology and to the physical world with which Industrial Ecology is concemed . . . The data are developed using technical expertise and practical experience as well as experimental results, technical records and accounting information. (Duchin 1992a) "Our models are 'open,' making use of exogenous information such as technological projections that are provided by engineers and other technical experts rather than being derived through the use of mathematical equations that describe idealized economic mechanisms. (Duchin 1992a) It is simply not possible to estimate the cost of, say, a 50% increase in reuse of all materials without specifying how the reductions might be achieved in a particular economy. . . In cases where there are several feasible approaches, the different alternatives will feed back on other sectors, on the environment, and on the standard of living in substantially different ways that need to be included in a realistic analysis. (Duchin, 1992)

Process of application of dynamic Input-Output modeling A note on process from Faye Duchin "One can carry out 10 analysis a t many of different levels. They all complement each other, but from a formal point of view address different questions and require different information. Even if one narrows the question down to "corporate policy and strategy development," what one will do depends on the nature and size of the corporation and its objectives. A large telecommunication company will need a detailed analysis of the entire economy because all other sectors use its output. A company that is considering offering services to treat a specific chemical waste product will need to focus more sharply on sectors producing or potentially producing this waste. Of course, they cannot (for many reasons) ignore the rest of the economy, but they do not require as much d~&,ll for it as in the first case. In order to examine the internal relations among business units of a company, one should build a model of these units and the interactions among them. While there are parallels in the ways of thinking about the pproblems, this is a completely different database than in the first case, where the national economy is modeled. Whether or not it would help for an individual plant depends upon the nature of the activities. For instance, I expect to soon begin a feasibility study for the analysis of activities in a single nursing home as a way of identifying where they should be standardizing, where the waste is, and also where the quality problems lie. 1 will identify the principal activities (e.g., physical therapy, nursing) and the corresponding inputs and outputs. Then through interviews 1 will attempt to formulate altemative ways of carrying out each activity The advantage of the 1-0 approach is our discipline of starting with systematic classifications, definitions, and units as well as our concept of activities and their interdependence." (Duchin 1 993, personal communication)

A wrpomte level applimtion A corporation evaluating its overall strategy for achieving sustainability would need to: Evaluate through 1-0 modeling altemative scenarios for combined technological-organizational change in economic and environmental terms; Set up an 1-0 framework for continuing evaluation and feedback as the changes are instituted; Determine impact on competitive situation; Determine what policy initiatives to launch to enhance public climate and regulatory structure to encompass its innovative strategies.

Applying industrial fcology: Structural Economics 9

Exmnpb '

An automobile manufacturer, for instance, might choose to study the impact on the environment and its own future of these socio/technological changes:

Shifts in engine design resulting from much higher emissions and fuel efficiency standards; A U.S. increase in fuel prices to global average; A dramatic increase in short to mid-distance rail transport and a resulting increase in demand for rolling stock and feeder motor vehicles;

In the study it could build alternative scenarios, such as:

Attempting to remain focused on motor vehicle transport through technological innovation to meet the regulatory and economic changes. Possible diversification into railcar production through acquisition of a current manufacturer and retooling some of the company's auto parts plants.

Researchers would then go through these steps: Create conceptual models to develop the most useful research questions and to guide next steps. Build a database of relevant data in a form the dynamic 1-0 models can use.

National Accounts with industries selected for the study (if working in a model of the national economy); Environmental Accounts reflecting resources and sinks (as well as wastes and emissions) needed to analyze the environmental impact of the technological changes in question; The company's financial information, especially capital stocks, investments, etc.; Data on capacity utilization and costs, stocks and flows for energy and materials; Information on the technologies being evaluated.

Use existing strategic and technology innovation plans to develop detailed scenarios about alternative future paths; Evaluate each scenario from economic and environmental perspectives using the dynamic input output model. .- - .. .-

The final products for the manufacturer would be a set of scenarios with assessment of the impact of each on its own economic interests and the interests of the environment; a rationale to guide policy and public relations work around its decision; and design of an lnput-Output modeling framework for continuing evaluation of strategies as other changes emerge.

At other levels, this pmcess can be used for: An agency, commission or business association working on regional, state, or national economic development. National or international bodies working on sustainable development globally and in developing countries. Whatever the level of modeling, 1-0 analysis is synergistic with other Industrial Ecology approaches,

especially Industrial Metabolism and Design for Environment.

Who is involved Executive team Finance R & D Information Systems Engineering

Benefits 1-0 analysis enables companies to consider the economic implications of complex webs of technical change. Traditional market mechanisms function best with relatively simple shifts in product design and technical process. The transition to sustainable industry will require modeling complex interactions among the ecosystem itsetf, systemic technical change, internal and external accounting, market forces, a regulatory mix including incentives as well as limits, and international treaties. 1-0 analysis provides valuable input to industrial ecology and also serves as the basis for the subsequent development of incentive schemes, legislation, and intemational agreements, as well as for identifying bottlenecks in research and development that will not be resolved in a timely fashion by private markets. Once this work has been done, the market mechanisms can often be relied upon to do their job. These (1-0) studies will provide the kind of information required both for public debate and decision-making and for private calculations about requirements and opportunities generated by the transition to sustainability. "The modem dynamic input-output model can evaluate not only the costs, but also the potential contributions to reducing the volume of pollution, of each Design for Environment strategy while capturing the simultaneous effects on many sectors of the economy over a period of several decades. . . These models provide the framework for evaluating DFE case studies in an economy-wide context." (Duchin 1992a)

C hallengedobstacles Since the 1-0 models depend on aggregations of data from Department of Commerce, the census, and other national agencies, a significant time lag must be factored in. The building of a model is a lengthy process requiring assembly of diverse data-bases, economic and technical. Some required data may be quite incomplete. On the other hand a powerful global 1-0 model and ones for the U.S. and other countries are already available, needing additional input relating only to particular technical innovations to be explored. This process has its costs. The budget for the Indonesian model described below is around $300,000. An individual company model might be in the range of $100,000.

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' 1.0 Applying Industrial Ecology: Structural Economics

Where has it been applied? Nn/ Inst for Economic Annlysis studies include: Dr. Duchin's application of 1-0 modeling to the Brundtland report recommendations indicate that this landmark in susrainable development seriously underestimated the need for change.

"Our results show that if moderate economic development objectives are achieved in the developing countries over the next several decades, the geographic locus of emissions will continue its historic shift from the rich to the poor economies while total emissions of the principal global pollutants will increase significantly. This is true even under optimistic assumptions about pollution reduction and controls through the accelerated adoption of modern, commercially proven technologies in both the rich and poor countries." (Duchin 1992a) As part of this work case studies using i-o modeling were conducted on electricity generation, industrial energy conservation, household energy use, motor vehicle transportation, metal fabrication and processing, construction and its major material inputs, paper and chemicals. (Duchin and Lange, 1992)

. -

A similar study is currently under way on development in the Indonesian economy. A major aim of this work is to identify ways for this country to reverse deforestation consistent with its long-term social and economic interests. Other dynamic 1-0 models a t NYU include: An empirical study on the impact of automation on employement, from 1960 to 2000. (Leontief and Duchin, 1986) A study of physical and economic feasibility of altemative strategies for transformation of biological wastes into useful products. It has been used to examine the prospects for transportation in Italy in the 21 st century for the Ministry of Transportation (Costa, 1990). A version was built for Germany to examine the effects of technological change (Edler, 1990 and on- going). Analysis of the effects of material substitutions and design changes on the auto industry and its suppliers. Analysis for Israel's Ministry of Communications of the physical inputs, labor, and investment required to increase the capacity of the telephone network. NYU's Institute for Economic Analysis has also developed dynamic price and income models, in combination with the physical model, for an in-depth analysis of technological change in the US since 1960 (Duchin and Lange, 1991, study for the Engineering Directorate of NSF).

Dr. Duchin is Director, Inst. for Economic Analysis, New York University, 269 Mercer St., NY, NY 10003. 2 1 2-998-7485

Hppiying maustrial tcorogy: Design tor Environment 11

Summary of the field Enabling design of products/services/processes with awareness of both ecological and economic costsibenefits across whole life cycle. A working definition: "Design for Environment designates a practice by which environmental considerations are integrated into product and process engineering design procedures. Accordingly, DFE is an attempt to implement industrial ecology principles into a systems analysis approach to environmental management. DFE practices require consideration of all potential environmental implications of the product or process being designed, not just those that are mandated by law. DFE practices are meant to develop environmentally compatible products and processes while maintaining product price/performance and quality standards." (Allenby & Fullerton, 1 99 1-21 Design for Environment (DFE) has evolved out of concurrent engineering and product life-cycle analysis as a vital stream of industrial ecology. This approach considers all potential environmental implications of a product or process being designed: energy and materials used, manufacture and packaging; transportation; consumer use, reuse or recycling; and disposal. DFE tools enable consideration of these implications at every step of the production process from chemical design, process engineering, procurement practices, and end product specification to post-use disposal. DFE also enables designers to consider traditional design issues of cost, quality, manufacturing process, and efficiency as part of the same decision system. Thus equipped, companies will be able to enhance environmental performance while keeping prices competitive. (Allenby, 1991 and 1991 -2) The need for this holistic design process is illustrated by this example from the automobile industry: Lighter cars, using more plastics, burn less gasoline. Steel, however, is easy to recycle, whereas the composite plastics that have replaced it resist reuse. The net result of the new materials r ? y be an immediate drop in fuel consumption but an overall increase in the amount of permanent waste created and in the total resources consumed. (Frosch & Gallopoulos, 1989) A sophisticated framework is needed to determine the net effect of such design choices. The systems approach of DFE naturally encourages expansion from life-cycle product design per se to design of manufacturing processes and facilities and even networks of facilities (as in an industrial park). At this point DFE is largely qualitative rather than quantitative analysis because hard environmental impact data is often not available on many materials, chemicals and processes. The two industries where DFE has emerged in particular are electronics and chemicals. In electronics the work is explicitly acknowledged as related to industrial ecology and tends to focus on product design. Apparently the chemical industry work has

emerged without reference to industrial ecology and is usually seen as design of facilities and production processes for waste minimization. While DFE appears to be quite relevant to design in a t least some service industries (like restaurants and hotels) we have not found examples of its application there. A European cousin to DFE is Walter Stahel's concept of Product-Life Extension. Stahel's work enhances product life through integrating design strategies for durability -- such as materials selection, modular systems and self-repairing components with business strategies -- such as rental of product combined with life-long service. He also considers the larger economic transition to a decentralized and skill-based service economy all of this implies. (Jill Watz and Arthur Purcell are U.S. affiliates of Stahel's Product- Life Institute.)

Process of application Applications for DFE can include:

Product design Packaging design Process engineering Product design specifications Facility design

The American Electronics Association D E task force has developed two design tools: 1. The DFE template is a generic set of procedures and practices that can be modified to match design practices and requirements of a specific firm, This tool is compatible with existing Design for X systems and existing design practices. It incorporates various design parameters such as design for remanufacturability, design for disassembly, etc.

This AEA group recommends gaining senior management leadership for elevating environmental considerations as product requirements on par with quality, cost, manufacturability, and so forth. The task force also emphasizes the importance of incorporating DFE at the earliest point possible, developing a "total product life-cycle plan with associated costs, and then as a key item in all design review and assessment phases."

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12 Applying Industrial Ecology: Design for Environment

2. The Design for Environment Information System summarizes relevant environmental health and safety, social, economic, and regulatory data applicable to specific design options. (A data base unique to each company.) Characteristics of such an information system should include:

It is comprehensive, providing sufficient data for a balanced, systemic evaluation of a product or process design; It encourages a multidimensional approach; It is nonprescriptive, providing context for informed decision-making and trade-offs; It is basically qualitative, not quantitative. In complex design situations, "Quantitative models simply eliminate too much information that could be valuable to the designer in reaching design decisions. " It indicates the degree of uncertainty associated with its data.

(This section based on Allenby & Fullerton, 1 991 -2) An EPA OPPT project for DFE in chemical industry has identified DFE tools such as: Cluster Scoring System characterizes multi-media risks associated with potential chemical substitutes. Use Clusters define a set of chemicals, processes, and technologies that can substitute for one another in performing a desired function, i.e. paint stripping may be achieved thru NMP, methylene chloride, sandblasting, plastic pellet blasting or surface preparation not needing paint. . Use Cluster Scoring System ranks clusters so developed against human and ecological risk, EPA regs, and pollution prevention opportunities. Cleaner Technology Substitutes Assessment (CTSA) Provides a framework. for systematically comparing the trade-off issues associated with alternatives; Compares risk, exposure, performance, and cost of substitutes as well as issues of energy use, resource conservation, and P2 opportunities. (From €PA OPPT overheads -- no date.) DFE works to "provide the designer with maximum flexibility to meet the constraints inherent in the design process . . . without overwhelming the process."

Who is involved Design for environment integrates work across many functions: marketing, R&D, manufacturing, quality, and procurement. DFE also calls for greater integration of personnel from suppliers in the design process. Putting it to work effectively calls for elegant cross- organization design, hopefully more effective than matrix teams. Executive level buy-in is required to achieve the combined organizational, financial and technical changes implied by DFE.

Benefits

DFE brings environmental and financtal design considerations together in a whole systems framework. DFE frames the environmental design issues for the industrial designer or process engineer in the same way that manufacturability, cost competitiveness, and quality now do. "Limited experience indicates DFE provides firms with product cost advantages while reducing uncertainty and risk to product lines generated by changes in environmental statutes and regulations. " (Allenby & Fullerton, 1991-2) DFE's systems approach could be an effective way of integrating the multiple considerations that have been loaded into the design process. (See challenges.) DFE integrates well with concurrent engineering practices already in place in many companies.

DFE is largely qualitative rather than quantitative as a strategic design choice. The design task is generally too complex to !end itself to quantitative analysis. In addition, too many value-judgments are buried in the data. This choice may inspire resistance in corporate cultures where the bean-counters rule. Designers themselves feel often besieged by Design for X, Y, Z and back to A, B & C. So many considerations have been added in piecemeal fashion to their task that they feel overloaded. (See benefits for response.) Hard environmental impact data is often not now available on many materials, chemicals and processes. There is much divergence and controversy concerning environmental objectives, with regulators setting some targets, scientists in different environmental realms proposing others, and environmental organizations calling for still others. Design for Environment endeavors need to sort through these conflicting objectives.

Where has it been applied? DFE emerged among environmental professionals in the American Electronics Association during the late 1980s. The idea follows the popular engineering concepts of "design for manufacturinp-' and "design for disassembly." AT&T has been a strong promoter of c concept, with the company's Sr. Environmental i Zorney, Braden Allenby, playing a key role in the 9FE task force of the Electronics Association. Th work group includes representatives of major manut xurers working together to evolve DFE tools. Thinking parallel to DFE has also been evolving in the chemical industry. Here the focus is on tools for whole systems process design in the manufacture of chemicals. Dow and DuPont are among the companies active with such initiatives. Product-Life Extension, has been employed in European companies such as Agfa-Gevaert and Siemens.

ChalIenges/obstad~ =

Applying Industrial Ecology: Management of the Interface 13

Mahagentent of the Interface Between Industry and Natural Systems

Industrial Ecology is already becoming cross- disciplinary and will need to continue its connections with other disciplines (in business functions as well as in the universities). Ecological economics, green management and accounting, and environmental public policy will inevitably co-evolve with IE. Al l in turn will need close relationships with environmental scientists doing global and regional ecological modeling. Their input will be vital to sustainable industrial planning and public policy for matching the inputs and outputs of the manmade world to the constraints of the biosphere. Developing this management of the interface between industry and the natural environment requires:

Expansion of knowledge about natural ecosystem dynamics on both a local and a global level; Detailed understanding of ecosystem assimilative capacity and recovery times; Real time information about current environmental conditions; A theoretical framework encompassing the interplay between natural and industrial ecosystems;

Studying ways that industry can safely interface with nature, in terms of location, intensity, and timing; Developing means of continuously adjusting these factors in response to real time feedback about environmental conditions: Development of specific indicators or indeqes that quantify the impact of industrial ecosystems on aspects of the natural environment. Concern about the risk of catastrophic failure of industrial operations, stressing design intrinsically incapable of acute environmental impact. When can the natural ecosystem be safely used as carrier or transfer medium, or as a cooperative processing component in +he industrial ecosystem?

(This set of points is based on Hardin Tibbs survey paper on IE.)

Feedback for self-regulation

Environmental information systems enabling tight feedback loops for self-regulation and environmental management, with real time response.

Summary of the field (Note, this section does not attempt to cover traditional environmental information systems, mostly designed to comply with external regulation.) "EcoFeedback" entails the use of information systems as feedback loops for self-regulation in environmental management, with the goal of operating as close to real-time as feasible. It can be applied in personal life, industry, and society to enable monitoring and

This involves:

correction of behavior needed to remain within acceptable limits. The term was first coined generically by systems scientist Erwin Laszlo, who discussed the need for information systems which would allow both individuals and organizations to estimate the effect on the environment of alternative activities. Jan Hanhart, a Dutch physicist and industrial engineer, brought the concept into commercial practice with successful household and community- level EcoFeedback(TM1 projects in the Netherlands. Hanhart defines EcoFeedback as "the regular presentation of actual and required values of sensitive environmental and humanitarian figures to the public ... together with personal options for improved behavior. Hanhart, who is now working as consultant to the Dutch Environment Ministry in further application of public EcoFeedback systems and software, goes on to observe that "EcoFeedback is cheap, since its main ingredient is information." Hanhart cites Juran's Quality Control Handbook to underscore the far greater importance of information over motivation or coercion: "To be in a state of 'self- control' a person should be provided with knowledge about: 1. what he or she is supposed to do, 2. what he [or she1 is actually doing, and 3. what choices he has to improve results wherever necessary. If any of these three conditions are not met, a person cannot be held responsible."

Pnnsess of application An environmental information management system should enable a company to:

Monitor regional environmental conditions and the environmental performance of businesses; Carry key indicators on global environmental conditions as guide to long-term policies: Monitor the total materials flow of the site (its industrial metabolism) against jointly established targets for reducing use of virgin materials and toxics'and lowering emissions/wastes; Monitor patterns of energy usage against targets for increasing efficiency; Enable comparative environmental performance ratios by correlation of environmentally relevant inputs and outputs to units of product: Provide feedback that enables plants to adapt in real time to conditions outside environmental performance quality limits; Provide feedback on cost savings through all of these enhancements; Share innovations and solve common problems through computer conferencing; Link environmental quality performance to compensation systems; Support maximum recycling and re-use of materials within and amongst businesses through a brokering database matching suppliers' resources with customers' needs;

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14 Applying Industrial Ecology: Management o f the Interface

To facilitate change the system would also include information on alternative production processes and materials and the economics of waste utilizabon.

Who is involved Management information systems and environmental management staff; Line workers responsible for correcnng for variances; Executive management when systems remain outside of limits; Regulators (in order to write more effecnve regs opening door to increased self-regulation); Competitors (to enable competition in environmental management); Suppliers.

Benefits Precise and timely feedback on environmental performance enables rapid response to variances; Widespread availability of relevant data enables all employees to take effective responsibility for environmental quality; Enhanced self-regulation of environmental performance puts the company ahead of the regulatory game and the competition; Avoided waste, pollution, penalties, and liabilities save the company money and reduce ecological impact of operations.

Challengedobstacles Data gathering mandated by regulatory agencies is often not usable for internal self-regulation. Setting up such systems may require an additional level of data collection. At policy level, the company must lobby for regulations that enable ecofecdback. Regulatory data demands may not be in line with the data needed for self-regulation.

Where has it been applied? In the Netherlands Jan Hanhan created a personal and neighborhood ecofeedback program that has been deployed throughout the country. Participants learn how to read their energy meters, what steps they can take to reduce energy usage, and how to form useful targets for reduction. (The classic TQM plan/do/checWact sequence.) Public media supply information on reasonable targets for usage. In the first years of the project (ea* 80s) 61 % of participants reduced usage an average of 5%. Texas Instruments Environmental Systems is developing software -- Chemtrack - that 'tracks all chemical deliveries to TI, and can follow a given chemical from order to delivery to point of use . . . extending record-keeping to the process level.' The system will enable management of chemical use at site, division, corporate, or process levels. "Suppose we need to minimize the use of ozone-depleting chemicals; we need to know where they're used, how much we used, in total and per product. For every gallon of a chemical used, we want to be able

to tell what percentage goes where -- to air, waste, water, and what remains on the product." TI plans to have all function at all US sites on line by the end of 1995. The company is sharing information on this system with other companies. (TI contact: Dawne Schomer, TI, POB 655012, M S 56, Dallas, TX 75265, 21 4-995-2483 fax -7004) [santa Clara story 1

Robert Snyder, writing in Environment Today (May 1992) details three levels of environment management and grading systems: "Duke Power Company instituted a simple binary checklist using yes/no questions to produce a cumulative score; scores are tracked for each facility, and rolled up into depanment and corporate totals .... Sandoz is tracking ten "key indicators" of environmental quality and performance across 350 facilities and a very diverqe product line, and tracks trends in these indicators as part of its continuous improvement process.. .. Polaroid goes even further, with its Toxic Use and Waste Reduction (TUWR) program, which rracks waste of all types for each type of material a t each production unit in all 25 plant sites. Reports compile waste generation levels per square foot of film or per camera manufactured. This data is in turn compiled into indices of waste reduction a t division and corporate levels." A fascinating 'what-if' story on self-regulatory feedback systems in another realm: Cybernetician Austin Hog at desi ed a regulato

Jat was basically an information s stem rapidly

indication of the healthy system limits. It enabled a

L n Reagan became ovemr this system was

A similar system of self-regulation is employed in S a m Clara County, California. With this support, manufacturers compete for low marks on EPA's toxic release inventory.

r f y s stem for the Savings an $I !? Loan dustry in Cali ornia

conveying data on the operation o 2 all S&Ls and

&srroyed on hisfirst B ay of once!

werful level of self-regulation within the industry.

Applying industrial Ecology: Bibliography 15

BiSliography on industrid ecology and sustainable development

Sources on industrial ecology - general Ausubel, Jesse H. and Sladovich, Hedy E., Technology and Environment, Washington, D.C.. National Academy Press, 1989. papers from industrial ecology symposium sponsored by National Academy of Engineering. Allenby, Braden R., "Industrial Ecology: the Materials Scientist in an Environmentally Constrained World," MRS Bulletin, 1 992. Allenby, Braden R., "Achieving Sustainable Development through Industrial Ecology," lntefnational Environmental Aff8irs, 1992. Dillon, Patricia S., Operationalizing lndusmal Ecology Principles: What Does It Mean for the Structure and Behavior of Firms. Prepared for: Industrial Ecology/Design Workshop sponsored by the National Academy of Engineering, July 13-1 7, 1 992. Frosch, Robert A., "Industrial Ecology: a philosophical introduction," in Nationai Academy of Sciences Proceedings, Feb 1992 (see below). Frosch, Robert A., and Nicholas E. Gailopoulos, Strategies for Manufacturing, Scientific American (Special Edition, September 1 9891, pp. 144-1 52. Frosch, Rabert A., and Nicholas E. Gallopoulos, "Towards an industrial ecology, " in Bradshaw, A.D., e t at, The Treatment and Handling of Wastes, 1992, Chapman & Hall, London. Hileman, Bette, "Industriai Ecology Route to Slow Global Change Proposed," C&EN, Aug. 24, 1992. Report on a meeting at Snowmass, CO organized by the Office for Interdisc. Earth Studies, UCAR. National Academy of Sciences, Proceedings, February 1 1992. An NAS colloquium on industrial ecology in May, 1991 , including papers by Robert Frosch, VP of General Motors Research Labs, Braden Allenby of A.T.& T., Lynn Jelinkski (then of Bell Labs, now Cornell), Faye Duchin of Institute for Economic Analysis, as well as govemment and academic contributors. 21 01 Constitution Avenue NW Washington DC 2041 8 Sales: 202-334-2525 The newsletter Business and the Environment covered this colloquium in the July 12, 1991 issue. Tibbs, Hardin, Industrial Ecology, an environmental agenda for industry, Arthur D. Little Inc. Technology and Product Development Directorate and the ADL Center for Environmental Assurance. 1 991. Contact Tibbs at 51 0- 547-6822 for copies. The best overview of work in industrial ecology through mid- 1991. (See above for summary of Tibbs technological and policy research agenda.) Tibbs, Hardin, Industrial Ecology - An Agenda for Environmental Management, Pollution Prevention Review, Spring 1992. (A shorter version of the ADL report) An updated version of Tibbs' paper can be found in Whole Earth Review #77, Wtnter 1992, pp 4-19.

Industrial Ecology - Design for Environment

Allenby, Braden R., "Design for Environment: a Tool Whose Time Has Come," Semiconductor Safety Assoc. Journal, Sept. 1991 5-9. Allenby, Braden R. and Fullerton, Ann, "Design for Environment -- A New Strategy for Environmental Management", Poliution Prevention Review, Winter

Allenby, Braden R ., Integrating Environment And Technology: Design For Environment. Prepared for The National Academy of Engineering Workshop On lndusmal Ecology And Design For Environment. Woods Hole, Ma., July 13-1 7, 1992. (Papers from this workshop will be published by National Academy of Engineering in 1993.) Fromm, Cart H., "Pollution Prevention in Process Design, " Pollution Prevention Review, Autumn 1992. (A framework engineers can use to routinely incorporate P2 opportunity assessements in plant design) Klimisch, Richard L., Automotive Design For The Environment (A Case Study Of Design For Disassembly). Given at The National Academy of Engineering Workshop on Industrial Ecology and Environmentally Preferable Innovation. Woods Hole, Ma. July 16, 1992 Jacobs, Richard A., "Design Your Process for Waste Minimization," Chem Eng Progress, June 1991, (Article focuses on facility and process design in chemical industry.) McHarg, Ian L., D e s i g n W i t h Nature, DoubledayMatural History Press, Garden City, NY, 1969 Stahel, Walter, 'Product life as a variable,' Science and Public Policy, Aug '86, pp 185-1 93. Reflecting his w o k a t the Product Life Inst, Geneva. In the US Arthur Purcell (310-475-1684) and Jill Watz (510- 339-9473) are representing this field of product life extension. It implies a transition from manufacturing per se to interlinked manufacturing of highly durable products and continuing service as a mode of business. Stahel, Walter and Giarini, Orio, The Limits to Certainty: Facing Risks in the New Service Economy, Boston, Kulwer Academic, 1989. Victor Papanek, 1973. Design for the Real World, Human Ecology and Social Change, Bantam Books, NY. Chapter 9 The Tree of Knowledge: Bionics calls for the field that is now emerging as IE and DFE. Sekutowski, Janine C., "Developing lntemal Competence in DFE: A Case Study." AT&T Bell Laboratories, Engineering Research Center, Princeton, New Jersey. A closely related project is E-Cycle, under development at Research Triangle Institute by John Warren. E-Cycle will be an evolving input-output data base of environmental and materials information to guide decision making in life-cycle analysis such as DFE.

1991 -92.

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16; Applying Industrial Ecology: Bibliography

Industrial Ecology - Industrial Metabolism Ayres, Robert U., e t at, Industrial Metabolism, the Environment, and Application of Materials-Balance Principles for Selected Chemicals, a research report of International Inst. for Applied Systems Analysis, October, 1989. Ayres, R.U. e t al, An Historical Reconstruction of Major Pollutant Levels in the Hudson-Raritan Basin 1880-1 980, Variflex Corp, Pittsburgh, 1985. (and in Environment 28:14-20 and 39-43.] Ayres, Robert U., "Industrial Metabolism" in Technology and Environment, edited by Jesse H. Ausubel and Hedy E. Sladovich (Washington, D.C.: National Academy Press, 19891, pp. 23-49. Ayres, Robert. U. and Simonis, Udo. E., editors, Industrial Metabolism - Restructuring for Sustainable Development, UN University Press, 1993. Stigliani, W.M., Anderberg, S., Industrial Metabolism and the Rhine Basin, Options, Sep '91, Int'l Inst. for Applied Systems Analysis.

Industrial Ecology - Structural Economics, I/O Modeis Duchin, Faye, "Industrial input-output analysis: implications for industrial ecology", NAS Proceedings, Feb 1, 1992, Washington DC (in NAS publication listed below). Duchin, Faye, Input-Output analysis and Design for Environment, I 992a, paper prepared for National Academy of Engineering Woods Hole Workshop on Design for Environment. Duchin, Faye, " Prospects for Environmentally Sound Economic Development in the North, in the South, and in North-South Economic Relations: the Role for Action-Oriented Analysis" to appear in Journal of Clean Technology and Environmental Sciences. Dr. Duchin is Director, Inst. for Economic Analysis, New York University. 21 2-998-7485 Duchin, Faye, and Lange, Glenn-Marie. "Technological Choices, Prices, and Their Implications for the U.S. Economy, 1963-2000," Economic Systems Research, 4: 1, 1992. Duchin, Faye, Input-Output analysis and Design for Environment, 1 992a, paper prepared for National Academy of Engineering Woods Hole Workshop on Design for Environment. Leontief, Wassily and Duchin, Faye, 1986. The Future Impact of Automation on Workers, Oxford Univ. Press.

Industrial Ecology - Emfeedback for self-regulation Hanhart, Jan, Ecofeedback, 1989, Rosmalen, The Netherlands. [Availabls in the US from Gil Friend and Associates, 21 1 8 7th St, Berkeley, CA 9471 0, $10 postpaid. 1 Andrew, A.M. "Ecofeedback and significance feedback in neural nets and in society," Journal of Cybernetics, v4, #3, Jul-Sep 1974, U of Reading, UK. Snyder, Robert, "Companies invent new methods to measure enviro-performance, " in Environment Today, May 1992 v3:4

Friend, Gil, "What Gets Measured Gets Done: Measuring Environmental Performance, " in EcoOpportunities, August 1992, Palo Alto CA Stafford Beer, Decision and Control, 1966, John Wiley, NY. See Senge reference below in organization change and design section.

Some work by ecologists that is necessary foundation for Industrial Ecology (C.S. Holling, Howard Odum, and Barry Commoner appear in none of the bibliographies for industrial ecology articles that I have seen. Yet from the ecological side they have each explored the connections between industrial systems and ecosystems. They bring deep knowledge of general systems and cybernetics to the task. This work is vital to the evolution of industrial ecology and in some cases is way ahead of it. I can't recommend too strongly that IE researchers study their writings.

Commoner, Barry, Making Peace With the Planet. 1990. Pantheon Books. "Science and politics, the private sector and public policy, the right to consume and the price of that right -- all of these issues must be dealt with togerher." Holling, C.S. Ed. 1978. Adaptive Environmental Assessment and Management. John Wiley and Sons, London. 1-377. Hollings, C.S., Myths of Ecological Stability: reslience and the problems of failure, in CF Smart and WT Stanbury (eds), S t u d i e s on Crisis Management, 1978, Butterworth for the Institute for Research on Public Policy, Montreal. Holling, C.S., 1986. Resilience of ecosystems; local surprise and global change, pages 292-31 7 in W.C. Clark and R.E. Munn, Eds. Sustainable Development o f the Biosphere, Cambridge University Press, Cambridge. Holling, C.C., 1987 Simplifying the complex: The paradigms of ecological function and structure. European Journal of Operational Research 30: 1 39- 146. Holling, C.S., New Science and New Investments for a Sustainable Biosphere., Arthur R. Marshall Jr. Laboratory of Ecological Sciences, Department of Zoology, University of Florida, Gainesville, FI. 3261 1. Prepared for the Biodiversity Project, International Institute of Ecological Economics and the conference on Investing in Natural Capital - a Prerequisite for sustainability July 2, 1992. Odum, Howard T., 1988. Self-organization, Transfonnity, and Information. Science, Vol. 242, November 25, Odum, H.T., in Economic-Ecological Modeling, Studies in Regional Science and Urban Economics, L.C. Braat and W.F.J. Lierop, Eds. (Elsevier, New York, 19871 vol. 16, chap 13, pp. 203-251 Odum, Howard, Ecosystem Theory and Application, Wiley, NY 1986.

-- EL)

Applying lndusrrial Ecology: Bibliography 17 . .

For i4 good beneral introductiori to ecology: Ehrlich, Paul R., The Machinery of Nature, The Living World Around Us - And How It Works. A Touchstone Book. Simon & Schuster, Inc., New York 1986. Friend, Gil, The Potential for a Sustainable Agriculture, in Sustainable Food Systems, 1 983, Dietrich Knorr, ed, Avi Publishing, Westport, CN Other sources on business and environmental management Bhushan, A.K. and MacKentie, J.C., "Environmental Leadership Plus Total Quality Management Equals Continuous Improvement, " Total Qualify Environmental Management, Spring 1992, pp 207- 224, New York.] Green Products by Design, Choices for a Cleaner Environment, Office of Technology Assessment, US Congress, Washington, 1 992. OTA-E-541 202-224- 8996 for orders. Business Week, "Growth vs Environment: The Push for Sustainable Development," May 1 1, 1992, pp. 66-75. "The Green Giant? It may be Japan," February 24, 1992. Reports on Japan's marketing and R & D lead in a broad range of environmental technologies. International Inst. for Sustainable Development and Deloine & Touche, Business Strategy for Sustainable Development, Leadership 8nd Accountability for the '90s. 1992, Winnepeg. This report is a valuable guide for companies moving to more comprehensive environmental management. Includes sections on strategic choices, enhancing management systems, accountability and stakeholder relations, corporate reporting, and a model 'sustainable development report'. IISD, 204-958-7700 fax: -771 0, Portage Ave. E, 7th Floor, Winnipeg, Manitoba, Canada R3B OY4. Callenbach, Ernest, Capra, Fritjof & Marburg, Sandra, The Elmwood Guide to Eco-Auditing and Ecologically Conscious Management. Global File Report No. 5 1990. Elmwood Institute, POB 5765, Berkeley, CA 94705, 5 10-845-4595. This survey and workbook is valuable for its systemic intryst ion of the technical and organizational auditing of a business's ecological performance. "Conservation Power: the payoff in energy efficiency," Business Week cover story, Sept. 16, 1991, pp. 86-92 and editorial, p 128. Freeman, Harry, e t at, "Industrial Pollution Prevention: A Critical Review, 1992. A report by Pollution Prevention Research Branch, Journal o f American Air & Waste Management Assoc, June '92. Gladwin, Thomas, Building the Sustainable Corporation: Creating Environmental Sustainability and Corporate Advantage. A report commissioned by the National Wildlife Federation Corporate Conservation Council, Jan. 1992. (Dr. Gladwin is Professor of Mgmt & lntl Bus at Stem School of Business, NYU.) Global Environmental Management Initiative, Summary, Total Quality Environmental Management

Workshop, 1990, GEMI, Washington, D.C. Corporate Quality: Measurements & Communications Conference Proceedings, 1 992. (See organizations for access.) Lent, Tony & Wells, Richard, Corporate Environmental Management, from Compliance to Strategy. Abt Associates, Cambridge, 1 99 1 Stahel, Walter, "Product life as a variable," Science and Public Policy, Aug '86, pp 185-1 93. Reflecting his work at the Product Life Inst, Geneva. In the US Arthur Purcell (31 0-475-1 684) and Jill Watz (5 10- 339-9473) are representing this field of product life extension. It implies a transition from manufacturing per se to interlinked manufacturing of highly durable products and continuing service as a mode of business. The journal, Total Quality Environmental Management started publishing in 1991. Available from Executive Enterprises Publications, 22 W. 21 st St., NY, NY 1001 0-6904, 1-800-332-8804 (which also publishes Pollution Prevention Review). Winsemius, Pieter & Ulrich, Guntram, Responding to the Environmentat Challenge, 1991 , McKinsey & Co. report on a worldwide survey of senior corporate executives. Amstel 344, 101 7 AS Amsterdamn, the Netherlands.

Ecologidavironmental economics and sustainable development Becker, Monica and White, Allen L., "Total Cost Assessment: catalyzing corporate self-interest in pollution prevention," Teilus Inst, 89 Broad St., Boston, MA 021 10 (Working Paper presented at National Acad. of Engineering, Technology & Environment Program Exploratory Workshop, July '91 .) Development of comprehensive cost accounting models that allow companies to take into account avoided (externalized) costs of design decisions. Bormann, Herman and Hellert, Stephen, ed., Ecology, Economics, Ethics: The Broken Circle. Yale, 1991. Canadian Institute of Chartered Accountants, Accounting and the Environment: Unearthing the Answers. a special issue of CA Magazine, March, 1991. Papers contribute to the rethinking of accounting/auditing practice, including accounting models that reflect environmental costs, revision of standards, tax incentives, ethical analysis, and a survey of approaches to eco-auditing. Access: ClCA 150 Bloor St W. Toronto M5S 2Y2 41 6-962-1 242 fax -0276. Costanza, Robert, ed. Ecological Economics, the Wence and Management of Sustainability, Columbia University Press, 1991 . Daly, Herman, Steady-State Economics, 2nd ed with new essays, 1991, Island Press. Daly, Herman and Cobb, John, "For the Common Good: Redirecting the Economy Toward Community, the Environment, and a Sustainable Future," Beacon Press, 1989. Duchin, Faye, see references under "industrial ecology"

Change Management Center, 6757 Thomhill Or., Oakland, CA 9461 1 510-333-1090 voicelfax

-+* $ 5 Applying Industrial Ecology: Bibliography

Gore, Senator Albert, Earth in the Balance, Ecology and the Human Spirit, 1992 Houghton Mifflin. Henderson, Hazel, Paradigms in Progress, 1992, Knowledge Systems Inc. tel: 800-999-851 7. Hoffman, Robert, Mclnnis, Bertram, and Van Drunen, Harry, "An Overview of the Sustainable Developmenr Demonstration Framework, " Robberts Associates, 1988. Contact Robert Hoffman, 340 MacLaren St Suite 63, Ottawa ONT K2P OM6, Canada, tel: 61 3-232-561 3 voice or fax. This paper describes a sophisticated conceptual framework for tracking multiple interactions among industrial, economic, social and natural systems; and methods 'and software for simulating these interactions. Their Whatif simulation program is a Mac II environment for running the Sustainable Development Demonstration Framework or for developing other models. They are developing a model for product life cycle analysis.

sustainable development lead to sustainability?", Proceedings of the American Solar Energy Society, 1990, Austin, Tx meeting, Boulder CO. Or request from Center for Sustainable Cities, College of Architecture, Univ. of Kentucky, Lexinton, KY USA 40506 tel: 606-257-761 7. Meadows, Donella & Dennis, Flanders, Jorgen, Beyond the Limits to Growth, Chelsea Green Publ, 1 992. 1-800-639-4099, fax: 802-333-9073. (copublication of Chelsea Green, McClelland & Stewart (Canada) and Earthscan (UK). A sobering update of the global modeling published as Limits to Growth in 1972. The systems dynamics based World3 model has evolved and the global ecosystem has been even more degraded in the 20 years. The authors project scenarios for sustainable development and for global collapse. Milbraith, Lester W. , Envisioning a Sustainable Society, State University of New York Press, 1990. Milbraith is Director of the Research Program in Environment and Society, SUNY, Buffalo. O'Neal, Gary, Sustainable Development and EPA, concepts, implications and recommended actions, 1990. This pathbreaking report has not been officially published but it has enjoyed wide informal circulation within the agency. Or. O'Neal is Director, Environmental Sustainability, €PA Region 10. 1200 6th Ave. Seattle, WA 98101 206-553-1 792. Publications of the World Watch Institute contain a wealth of resources on sustainable economics and development, as well as the full range of environmental issues. WI, 1 776 Massachusetts Ava. NW, Washington DC 20036-1 904 202-452- 1999. A few examples: Brown, Lester, Flavin, Christopher, and Postel, Sandra, Saving the Planet: How to Shape an Environmentally Sustainable Global Economy, 1 992. Chandler, William, "Designing Sustainable Economies," Postel, Sandra and Flavin, Christopher, "Reshaping the Global Economy," State of the World 7997, pp. 170-1 88.

,- Levine, Richard S., Yanarella, Ernest J., "Does

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Durning, Alan, "Asking How Much Is Enough," State o f the World 199 I, pp. 153-1 69. Valuable exploration of the transition from 'the consuming society' t o 'a culture of permanence.'

Organizational transformation Beer, Michael, "The Critical Path for Change: K e y s to Success and Failure in Six Companies," in Corporate Transformation: Revitalizing Organizations for a Competitive World. 1 988 San Francisco: Jossey-Bass Publishers. Beer, Stafford, Platform for Change, 1975, John Wiley & Sons, NY. Brain of the Firm, 2nd ed. 1981, John Wiley & Sons, NY. The Heart o f Enterprise, 1979, John Wiley & Sons, NY. Beer's Viable System Model offers a dynamic organizational structure grounded in the understanding that argzkations are living systems interacting with larger living systems. It is a vital tool for managing the transition to industrial ecology. Business Week articles on corporate retrenchment: "Tough Times, Tough Bosses," Nov. 25, 1991. "All That Lean Isn't Turning Into Green," Nov. 18, 1991. "No More Mr. Nice Guy at P & G," February 3, 1992. Change Management Network, Prospectus, 1991, Emery, Fred and Trist, Eric, Towards a Social Ecology. 1973, London, Plenum Books. Senge, Peter, The fifth Discipline: The A n and Practice of the Learning Organization, 1990. New York Doubleday/Currency . Germill, G. and Smith, C. "A Dissipative Structure Model of Organization Transformation," 1 985 Human Relations 38(8) p. 751 -766. Leifer, R., "Understanding Organizational Transformation Using a Dissipative Structure Model" Human Relations 1989 42(10): p. 899-91 6.