Flow studies

(industrial metabolism)

Figure 27.1 Industrial ecology operating at three levels industrial district in Kalundborg, Denmark; and (b) to consider forms of industrial organization beneficial to advancing industrial symbiosis.

Symbiosis is a biological term referring to 'a close sustained living together of two species or kinds of organisms'. The term was used as early as 1873 by a German botanist, H.A. De Bary, to describe the intimate coupling of fungi and algae in lichens. While nature's living arrangements can be beneficial or harmful, the specific type of symbiosis known as mutualism refers to the situation in which at least two otherwise unrelated species exchange materials, energy or information in a mutually beneficial manner (Miller 1994). So, too, industrial symbiosis consists of place-based exchanges among different entities. It stresses collaboration, since, by working together, businesses strive for a collective benefit greater than the sum of individual benefits that could be achieved by acting alone. Such collaboration can also foster social values among the participants, which can extend to the surrounding neighborhoods. As described below, the symbioses need not occur within the strict boundaries of a 'park', despite the popular usage of the term 'eco-industrial park' to describe organizations engaging in exchanges.

The evolution of particular forms of industrial organization, that is, the way firms structure themselves to gain maximum competitive advantage, has long been a focus of economists. One of the dominant theories in this field is based on the notion that firms engaged in transactions (supply chains or extended product life cycles) will enter into whatever arrangements minimize the costs of these transactions (Williamson 1979). In the past, the environmental costs considered were relatively small and arrangements typically involved various forms of integration along the supply or value chain, such as traditional vertical integration in the iron and steel industry. More recently, transaction costs arising from proper environmental management have changed that calculus and new forms of organization are emerging to handle them. For example, the German packaging waste management system, Duales System Deutschland, is an independent company, funded by those firms that were made responsible under a German law for taking back packaging waste. The law created a new cost for these firms, in essence internalizing what had been an externality. The most economic organizational structure was deemed to be the consortium format that was adopted. The example of Kalundborg, Denmark, described below, is another window on the type of organizational structure that has evolved to re-use resources that would have been wasted and provides an outstanding example of the potential of industrial symbiosis.

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