Policy implications of the industrial metabolism perspective

It may seem odd to suggest that a mere viewpoint - in contradistinction to empirical analysis - may have policy implications. But it is perfectly possible. In fact, there are two implications that come to mind. Both will recur more than once in the papers that follow. First, the industrial metabolism perspective is essentially "holistic" in that the whole range of interactions between energy, materials, and the environment are considered together, at least in principle. The second major implication, which follows from the first, is that from this holistic perspective it is much easier to see that narrowly conceived or short-run (myopic) "quick-fix" policies are very far from the global optimum. In fact, from the larger perspective, many such policies can be positively harmful.

The best way to explain the virtues of a holistic view is by contrasting it with narrower perspectives. Consider the problem of waste disposal. It is a consequence of the law of conservation of mass that the total quantity of materials extracted from the environment will ultimately return thence as some sort of waste residuals or "garbo-junk" (Ayres and Kneese, 1969, 1989). Yet environmental protection policy has systematically ignored this fundamental reality by imposing regulations on emissions by medium. Typically, one legislative act mandates a bureaucracy that formulates and enforces a set of regulations dealing with emissions by "point sources" only to the air. Another legislative act creates a bureaucracy that deals only with waterborne emissions, again by "point sources." And so forth.

Not surprisingly, one of the things that happened as a result was that some air pollution (e.g. fly ash and SOx from fossil fuel combustion) was eliminated by converting it to another form of waste, such as a sludge to be disposed of on land. Similarly, some forms of waterborne wastes are captured and converted to sludges for land disposal (or, even, for incineration). Air and water pollution were reduced, but largely by resorting to land disposal. But landfills also cause water pollution (leachate), and air pollution, owing to anaerobic decay processes.

In short, narrowly conceived environmental policies over the past 20 years and more have largely shifted waste emissions from one form (and medium) to another, without significantly reducing the totals. In some cases, policy has encouraged changes that merely dilute the waste stream without touching its volume at all. The use of high stacks for coal-burning power plants, and the building of longer sewage pipes to carry wastes further offshore, exemplify this approach.

To be sure, these shifts may have been beneficial in the aggregate. But the costs have been quite high, and it is only too obvious that the state of the environment "in the large" is still deteriorating rapidly. One is tempted to think that a more holistic approach, from the beginning, might have achieved considerably more at considerably less cost.

In fact, there is a tendency for sub-optimal choices to get "locked in" by widespread adoption. Large investments in so-called "clean coal" technology would surely extend the use of coal as a fuel - an eventuality highly desired by the energy establishment - but would also guarantee that larger cumulative quantities of sulphur, fly ash (with associated toxic heavy metals), and carbon dioxide would be produced. The adoption of catalytic convertors for automotive engine exhaust is another case in point. This technology is surely not the final answer, particularly since it is not effective in older vehicles. Yet it has deferred the day when internal combustion engines will eventually be replaced by some inherently cleaner automotive propulsion technology. By the time that day comes, the world's automotive fleet will be two or three times bigger than it might have been otherwise, and the cost of substitution will be many times greater.

The implication of all these points for policy makers, of course, is that the traditional governmental division of responsibility into a great number of independent bureaucratic fiefdoms is dangerously faulty. But the way out of this organizational impasse is far from clear. Topdown central planning has failed miserably, and is unlikely to be tried again. On the other hand, pure "market" solutions to environmental problems are limited in cases where there is no convenient mechanism for valuation of environmental resource assets (such as beautiful scenery) or functions (such as the UV protection afforded by the stratospheric ozone layer). This is primarily a problem of indivisibility. Indivisibility means that there is no possibility of subdividing the attribute into "parcels" suitable for physical exchange. In some cases this problem can be finessed by creating exchangeable "rights" or "permits," but the creation of a market for such instruments depends on other factors, including the existence of an effective mechanism for allocating such rights, limiting their number, and preventing poaching or illicit use of the resource.

Needless to say, the policy problems have economic and sociopolitical ramifications well beyond the scope of this book. However, as the Chinese proverb has it, the longest journey begins with a single step.