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The Greening of Industrial Ecosystems NATIONAL ACADEMY PRESS 2101 Constitution Ave., NW Washington, DC 20418 The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievement of engineers. Dr. Robert M. White is president of the National Academy of Engineering. This volume has been reviewed by a group other than the authors according to procedures approved by a National Academy of Engineering report review process. The interpretations and conclusions expressed in the symposium papers are those of the authors and are not presented as the views of the council, officers, or staff of the National Academy of Engineering. Funding for the activity that led to this publication was provided by the W. M. Keck Foundation, the Andrew W. Mellon Foundation, and the National Academy of Engineering Technology Agenda Program. Library of Congress Cataloging-in-Publication Data The greening of industrial ecosystems / Braden R. Allenby and Deanna J. Richards, editors. p. cm. Includes bibliographical references and index. ISBN 0-309-04937-7 1. Environmental sciences. 2. Factory and trade waste. 3. Environmental policy. 4. Conservation of natural resources. I. Allenby, Braden R. II. Richards, Deanna J. GE105.G74 1994 93-46753 363.73'1—dc20 CIP Copyright 1994 by the National Academy of Sciences. All rights reserved. Cover art: Spinozza, mixed media on paper, courtesy of the artist, Karen Vogel, Washington, D.C. This book is printed on recycled paper. Printed in the United States of America

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The Greening of Industrial Ecosystems Steering Committee Members ROBERT A. FROSCH, Senior Research Fellow, John F. Kennedy School of Government, Harvard University, and Senior Fellow, National Academy of Engineering ERNEST L. DAMAN, Chairman Emeritus, Foster Wheeler Development Corporation SHELDON K. FRIEDLANDER, Parsons Professor of Chemical Engineering, and Director, Air Quality/Aerosol Technology Laboratory, University of California at Los Angeles HENRY R. LINDEN, Max McGraw Professor of Energy and Power Engineering and Management, Illinois Institute of Technology WILLIS S. WHITE, JR., Retired Chairman, American Electric Power Company, Inc. Staff DEANNA J. RICHARDS, Project Director BRADEN R. ALLENBY, J. Herbert Hollomon Fellow (January-December 1992) MARION R. ROBERTS, Senior Program Assistant

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The Greening of Industrial Ecosystems This page in the original is blank.

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The Greening of Industrial Ecosystems Preface Industrial ecology is the study of the flows of materials and energy in industrial and consumer activities, of the effects of these flows on the environment, and of the influences of economic, political, regulatory, and social factors on the flow, use, and transformation of resources. The objective of industrial ecology is to understand better how we can integrate environmental concerns into our economic activities. This integration, an ongoing process, is necessary if we are to address current and future environmental concerns. We have made great progress in the last two decades in targeting specific sources of pollutants and controlling them at the ends of pipes, the tops of smokestacks, and in landfills. In the 1990s, however, many of our concerns are on sweeping regional and global issues such as acid rain, stratospheric ozone depletion, global climate change, and dispersion of heavy metals throughout the biosphere. These new concerns and the approaches to addressing them require improved understanding of the environmental effects of industrial use and transformation of materials and energy, including consumer use and disposal of products. It also requires a better appreciation of the factors that influence such use, transformation, and disposal. This understanding can inform efforts to minimize environmental degradation. At the most general level, the reshaping of industrial systems for environmental and economic success is based on efficient use of materials and energy, substitution of more abundant and environmentally preferable materials for those that are rare or environmentally problematic, reuse and recycling of products and materials, and control of waste and emissions. More derailed examination of the integration of environmental concerns into economic decision making raises a plethora of questions, beginning with the one that opens the overview of this book: "Paper or plastic?" This leads to more general questions: How do we assess the environmental preferability of one material over another? What improvements do we need in the design and management of materials or products? How can we

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The Greening of Industrial Ecosystems integrate new environmental design and engineering concepts into industry practices and into engineering and management education? How can we overcome the failure to adopt existing technologies and methodologies that represent improvements over prevailing industrial practices? To what extent is that failure a result of competing priorities in management and marketing, or of conflicting economic incentives? How do we move to market-based initiatives for internalizing environmental costs when that generally implies increasing prices on less environmentally desirable materials, products, or practices? This volume is a product of the National Academy of Engineering (NAE) continuing program on Technology and Environment. It examines the greening of industrial systems through the lens of industrial ecology. It examines promising approaches to environmentally conscious design and manufacturing, as well as education and research needs. It promotes greater recognition of environmental dimensions in formulating technology policies and management strategies in both the public and the private sectors. The case studies of emerging business practices described in this volume suggest fundamental management strategies of corporate environmental stewardship. These are in keeping with world-class manufacturing practices such as commitment of senior management to change, the setting of goals and priorities, using cross-function teams, baselining, forming partnerships with stakeholders, and managing the supplier chain. Arich set of examples and concepts on the subject of industrial ecology and environmentally conscious design is presented in this publication. This book is the result of a two-year effort, based on a workshop held at Woods Hole, Massachusetts, in July 1992. The workshop and planning effort were chaired by Robert Frosch. The concept for this activity may be traced to a proposal developed by Bruce Guile and Deanna Richards. In addition to these individuals, special thanks go to Braden Allenby, the NAE's second J. Herbert Hollomon Fellow, who organized the workshop, provided valuable ideas and contributions to the project, and in general helped further the NAE's effort in this area of industrial ecology. We are indebted to the workshop steering committee members (whose names appear on p. iii), to the authors for their excellent chapters, to an editorial team consisting of Braden Allenby, Deanna Richards, Dale Langford, Bette Janson, and Marion Roberts, and to Bruce Guile, director of the NAE Program Office, for his advice and assistance on the project and publication. Finally, I would like to express my appreciation to the W. M. Keck Foundation for its generous support of this project and to the Andrew W. Mellon Foundation for supporting related elements of the NAE's program on Technology and Environment. Robert M. White President National Academy of Engineering

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The Greening of Industrial Ecosystems Contents     The Greening of Industrial Ecosystems: Overview and Perspective Deanna J. Richards, Braden R. Allenby, and Robert A. Frosch   1 UNDERSTANDING INDUSTRIAL ECOLOGY AND ITS CONTEXT         Industrial Metabolism: Theory and Policy Robert U. Ayres   23     Energy and Industrial Ecology Henry R. Linden   38     Input-Output Analysis and Industrial Ecology Faye Duchin   61     Wastes as Raw Materials David T. Allen and Nasrin Behmanesh   69     Economies and Sustainable Development Pierre Crosson and Michael A. Toman   90     From Voluntary to Regulatory Pollution Prevention Frederick R. Anderson   98     International Environmental Law and Industrial Ecology Robert E Housman   108     Industrial Ecology: The Role of Government Matthew Weinberg, Gregory Eyring, Joe Raguso, and David Jensen   123

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The Greening of Industrial Ecosystems EMERGING INDUSTRIAL ENVIRONMENTAL PRACTICE         Integrating Environment and Technology: Design for Environment Braden R. Allenby   137     Preventing Pollution and Seeking Environmentally Preferable Alternatives in the U.S. Air Force Edward T. Morehouse, Jr.   149     Designing the Modem Automobile for Recycling Richard L. Klimisch   165     Greening the Telephone: A Case Study Janine C. Sekutowski   171     The Utilization-Focused Service Economy: Resource Efficiency and Product-Life Extension Walter R. Stahel   178     Zero-Loss Environmental Accounting Systems Rebecca Todd   191     Implications of Industrial Ecology for Firms Patricia S. Dillon   201     Design for Environment: An R&D Manager's Perspective Robert C. Pfahl, Jr.   208 EDUCATION AND RESEARCH NEEDS         The Two Faces of Technology: Changing Perspectives in Design for Environment Sheldon K. Friedlander   217     Industrial Ecology and Design for Environment: The Role of Universities John R. Ehrenfeld   228 Biographical Data   241 Index   251

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The Greening of Industrial Ecosystems THE GREENINIG OF INDUSTRIAL ECOSYSTEMS