New Bottom Line Volume 3.9 – Industrial Ecosystems: World Without Waste, Amen?

May 17, 1994

“In the quest for survival, success and fulfillment, the ecological view offers an invaluable insight. It shows the way for [humanity to be]… the enzyme of the biosphere–its steward, enhancing the creative fit of man-environment, realizing design with nature.”
-Ian McHarg, 1969

Imagine a manufacturing company that makes two products. One product accounts for half the tonnage leaving the plant, and all the company’s revenue. The other product–the other half of the output–generates no revenue. The company makes it, but can’t sell it.

You’ve just taken over as CEO, and the board of directors, which has finally figured out what’s going on, has asked you to explain. What do you say?

The only thing you can say, after the inevitable apologies for the situation you inherited, is that you will fix the problem. And there seem to be only two business solutions to the problem: sell what you make, or stop making what you can’t sell.

This tale characterizes almost every company on the planet, and our economy as a whole. The “other product” is what we call “waste”–what some people are now starting to call “non-product outputs.” It’s produced by manufacturers, distributors, and consumers. It finds its way into landfills, waterways and atmosphere, and sometimes into living tissue.

We usually think of pollution as the unintended byproduct of intended products–even though, according to Hardin Tibbs, not just half but “98% of all materials produced become waste.” We try to control it, regulate it, clean it up, remediate it, minimize it, prevent it. But what if we were to think of waste, pollution, non-product outputs as product that we make but don’t sell? What if we were to stop producing it?

Impractical, you may say, to imagine a complex, modern economy without some pollution. But consider the most complex and sophisticated system we know: the biosphere. This thin film of life, and the ecosystems that it contains–the result of three and a half billion years of the “R&D” of ecosystem succession and natural selection–display key characteristics that the industrial world would do well to study, and emulate.

Theoretical, you may say; industrial systems aren’t ecosystems. But consider the “industrial symbiosis” in Kalundborg, Denmark, where a rich pattern of energy and material exchange has evolved among a handful of companies–including a refinery, powerplant, pharmaceutical company, fish farm, greenhouse, wallboard factory and district heating plant–is reducing waste, increasing efficiency, and providing a handsome return on investment.

In fact the concept of “industrial ecology” is emerging as a new hot button in environmental management. The National Academy of Engineering sponsored an invitational conference in May 1994 at which executives and engineers from companies as diverse as AT&T, AB Volvo and Kennecott discussed their explorations of modeling industrial systems on natural systems.

Some companies are developing ecosystem-like energy and materials exchanges within their own corporate boundaries. Some are developing energy and materials exchanges with other companies, whether within the within the economic boundaries of regional markets or the physical boundaries of “eco-industrial parks”–intentionally designed industrial ecosystems combining pollution prevention, process re-engineering, waste exchange, energy cascading and other features within a systems framework that seeks to maximize the efficiency of park as a whole, rather than trying to maximize the efficiency of any individual company.

Many of these concepts have been tried to a limited extent, but the potential of a systematic approach is still untapped. Even the chemical industry, a leader in finding products from byproducts, hasn’t gone far enough. To incinerate the waste from its top 50 products in 1986 would have cost eight times the industry’s profits in that year, according to Paul Hawken. Instead it was “disposed of” and society–all of us–absorbed the biological cost. Perhaps therein lies a clue: accountability for the real costs of waste may be the necessary incentive for companies to sell everything they make.

A few simple questions, a bit of courage and an open mind may open the window to a strikingly different future: What would a world without waste look like? What would a company without waste look like? What could your company learn from a meadow?

(c) 1994 Gil Friend. All rights reserved.

New Bottom Line is published periodically by Natural Logic, offering decision support software and strategic consulting that help companies and communities prosper by embedding the laws of nature at the heart of enterprise.

Gil Friend, systems ecologist and business strategist, is President and CEO of Natural Logic, Inc.

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