At this point it is probably useful to introduce the notion of industrial ecology (IE) more formally. Industrial ecology is a neologism intended to call attention to a biological analogy: the fact that an ecosystem tends to recycle most essential nutrients, using only energy from the sun to drive the system.1 The analogy with ecosystems is obvious and appealing (Ayres 1989a). In a 'perfect' ecosystem the only input is energy from the sun. All other materials are recycled biologically, in the sense that each species' waste products are the 'food' of another species. The carbon-oxygen cycle exemplifies this idea: plants consume carbon dioxide and produce oxygen as a waste. Animals, in turn, require oxygen for respiration, but produce carbon dioxide as a metabolic waste. In reality, the biosphere does not recycle all of the important nutrient elements - notably phosphorus and calcium - without help from geological processes; but this is probably a quibble. An ecosystem involves a 'food chain' with a number of interacting niches, including primary photosynthesizers (plants), herbivores, carnivores preying on the herbivores, saprophytes, parasites and decay organisms.
The idea of 'industrial ecology' has taken root in the past few years, especially since the well-known article by Frosch and Gallopoulos in a special issue of Scientific American (Frosch and Gallopoulos 1989). The industrial analog of an ecosystem is an industrial park (or some larger region) which captures and recycles all physical materials internally, consuming only energy from outside the system, and producing only non-material services for sale to consumers. This vision is highly idealized, of course. The notion of deliberately creating 'industrial ecosystems' of a somewhat less ambitious sort has become increasingly attractive in recent years. Author Paul Hawken has commented: 'Imagine what a team of designers could come up with if they were to start from scratch, locating and specifying industries and factories that had potentially synergistic and symbiotic relationships' (Hawken 1993 p.63).
An industrial ecosystem, then, could be a number of firms grouped around a primary raw material processor, a refiner or convertor, and a fabricator, various suppliers, waste processors, secondary materials processors, and so forth. Or it could be a number of firms grouped around a fuel processor, or even a waste recycler. The main requirement is that there be a major 'export product' for the system as a whole, and that most of the wastes and by-products be utilized locally.
But, as this book has pointed out, there are in fact a large number of plausible possibilities for 'internalizing' material flows in various ways. This possibility is not restricted to process wastes from industry. It also applies to final consumption wastes, for example of packaging materials. At the industrial level, this implies that some firms must use the wastes from other firms as raw material feedstocks. Other firms must use the wastes from final consumers in a similar manner. The complex web of exchange relationships among such a set of firms can be called an 'industrial ecosystem'. This concept was given a considerable boost in recent years by Robert Frosch, especially in the article in Scientific American cited above (Frosch and Gallopoulos 1989). With others, he has also encouraged the US National Academy of Engineering to sponsor a series of summer studies (leading to books) promoting the concept and exploring various aspects.
At first glance, systems integration looks rather like old-style 'vertical integration', except that there is no need for all of these enterprises to have common ownership. In fact, the flexibility and innovativeness needed for long-term success is more likely to be promoted by dispersed ownership. Yet a considerable degree of inter-firm cooperation is needed as well. We will return to this point later.
The most influential - and possibly the only - prototype for such a system was, and still is, the Danish town of Kalundborg. In this town waste heat from a power plant and a petroleum refinery has been used to heat greenhouses and other wastes from several large industries have been successfully converted into useful products such as fertilizer for farmers, building materials, and so on. The Kalundborg example is discussed in full in Chapter 33.
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