ASP VIII CYCLE

Course: Global Change and Sustainability

Coordinators: Barbara Betti, Stefano Consonni and Marino Gatto
Student: Chiara Gastaldi
Affiliation: Politecnico di Torino, Mechanical Engineering
Track: Design for sustainability (Prof. S. Barbero)

Sustainable development: from policy to practice
ABSTRACT

The purpose of this paper is to explore the implementation of the concept of sustainable
development in practical terms. Firstly environmental policy making shall be explored, secondly
the contribution private companies can give with the support of the public sphere will be
exemplified through a series of case studies.
The presented tools supporting both public and corporate decision making belong to Industrial
Ecology, a discipline that seeks to discover how industrial processes can become part of an
essentially closed cycle of resource use and reuse in concert with the environment.
This holistic approach does not exclude economic growth, on the contrary, if properly promoted
by organizations such as the EU, it can become the driving force to ensure full participation of
the private sector.

THE IMPORTANCE OF GREEN ACCOUNTING: SETTING A STANDARD

The concept of sustainable development was first stated in the report of Our Common Future
prepared by Commission on Environment And Development of United Nations in 1987 and
defined as development that meets the needs of the present without compromising the ability of
future generations to meet their own needs"[1].
Environmental awareness has become a widespread concept thanks to increasing globalization in
the last two decades, besides such a large-scale issue calls for a global effort in order to be
effective.
Europe 2020 is the EU's growth strategy for the coming decade, pushing the EU to become a
smart, sustainable and inclusive economy. The European Commission adopted a "Roadmap for
a resource-efficient Europe"[2] which provides a framework in which future actions can be
designed and implemented coherently. One of the key steps in order to reach these goals in an
efficient manner is to understand the dynamics of human-nature interaction and to be able to
record it. Industrial Ecology, a "systems-based, multidisciplinary discourse that seeks to
understand emergent behavior of complex integrated human/natural systems"[3], answers to this
need. IE has a set of tools, among which those related to Environmental accounting (MFA and
EFA): public policy can thus be better designed to take into account the costs and benefits of
using resources more efficiently and the private sector will benefit from the necessary
predictability and transparency to take long-term decisions[4].
The European Strategy for Environmental Accounting (ESEA) identifies Economy-wide
Material Flow Accounts (EW-MFA) as one core module of Environmental Accounts to be
produced regularly and in a timely fashion in order to support policy making. Moreover EW-
MFA has been included as one of three modules in Regulation (EU) 691/2011 on European
Environmental Economic Accounts which will enter into force with the 2013 data collection: this
regulation [5], establishes a legal basis and framework for the collection, transmission and
evaluation of environmental economic accounts for all the EU member states.

FROM DATA TO POLICIES: THE IMPORTANCE OF INDICATORS

Eurostat's economy-wide material flow accounts (EW-MFA) measure in metric tonnes all
material inputs (excluding water and air) broken down into the main material categories such as
biomass, metal ores, non-metallic minerals, fossil energy materials/carriers, and waste for final
treatment.
In order to easily manipulate and understand a large quantity of data, a set of indicators has been
developed such as [6],[7]
- domestic extraction used (DEU) which measures the used virgin materials taken from the
national territory and transformed into products;
- domestic material input (DMI) which also includes imports;
- domestic material consumption (DMC) which also includes imports but excludes exports;
- domestic processed output (DPO), which includes all the used materials that are
discarded into the natural environment after transformation.
To include otherwise hidden flows such as those coming from extracted un-used material and the
possibility of de-localisation of production processes and trade of goods Total Material
Requirement (TMR) and Total Material Consumption (TMC) were created.
This toolbox can answer many relevant policy-making questions such as the intensity of resource
use (TMR/GDP ratio), sector-specific information on import and exports, the measure with
which the output problem is taken up by other economies (Total exports) and the intensity with
which Natures sink function is used (DPO/GDP ratio). Most importantly, the highly aggregated
nature of MFA indicators, combined with the usual ones such as GDP, allows to monitor
sustainability and decoupling between economic growth and environmental pressures. MFA
methodology is also expected to gain importance for assessing alternative futures of resource use
in relation to policy alternatives [8]
As EW-MFA indicators can be used for monitoring the size of the system on a general level,
they can also be used to set targets on the overall system level: an example of this is the Italian
Strategy for Sustainable Development, approved in 2002 by the Inter-ministerial Council for
Economic Policy (CIPE), which set an ambitious target of substantial reductions of Italian
TMR[9].

NARROWING THE TARGET: LIFE CYCLE ASSESSMENT

Industrial Ecology offers another tool, Life Cycle Assessments, which was considered by the
European Commission, to provide the best framework for assessing the potential environmental
impacts of products currently available[10].
Life Cycle Assessment (LCA) already possesses an international standard methodology-wise
(ISO 14040) and can be decomposed into two successive phases [11]:
- Life Cycle Inventory: the collection and analysis of environmental interventions data
associated with a product from the extraction of raw materials through production and
use to final disposal, including recycling, reuse, and energy recovery;
- Life Cycle Impact Assessment: the estimation of indicators of the environmental
pressures in terms of e.g. climate change, resource depletion, human health effects, etc.
associated with the environmental interventions attributable to the life-cycle of a product.
LCA is a product based instrument and it is therefore natural to use it in product based
regulation, to quantify the environmental pressures related to goods and services (products), the
environmental benefits, the trade-offs and areas for achieving improvements (identifying
priorities).

FROM POLICIES TO PRACTICE: A WORK IN PROGRESS
It has to be kept in mind that both MFA and LCA should be used as decision supporting rather
than decision making tools: MFA, in fact, does not contribute with value judgments (i.e. it does
not convey opinions on whether flows are justified by the benefits provided) [12], while LCA
tends to exclude economic and social impacts, as well as the consideration of more local
environmental issues [13].
Moreover one of the greatest strengths of MFA (its high level of aggregation) is also a weakness,
in the sense that the black box approach it adopts with the system under analysis does not allow
for a prevision about the economic consequences of regulatory intervention. LCA, on the other
hand does not, at the moment, take into account rebound effects in a sufficient manner [14].

Therefore, MFA and LCA are not appropriate as standalone tools in this context. To this issue
SERI (Sustainable Europe Research Institute) has contributed, in recent years, with various
projects apt to support decision makers, both public and private, in the areas of sustainable
development with information relevant to their goals within the framework of national, regional
and European sustainable policies [15].
MOSUS [16] (Modelling opportunities and limits for restructuring Europe towards
sustainability), a project completed in 2006, not only developed the first global database for
material inputs on a national level (an effort which opened the way to regulation 691/2011), but
also formulated 2020 EU development scenarios and evaluating the economic, environmental
and social impacts of key environmental policy measures in order to present quantified policy
recommendations for responding to global environmental challenges and changes.
Firstly a multi-country multi-sector model was created (GINFORS) [17]: the world-wide
domestic extraction was calculated by means of the Material Input Model which took into
account both direct and indirect flows. Furthermore the analysis of the material flux managed to
capture both primary (increased demand in country A leads to increased export in Country B)
and secondary effects (increased production in country B leads to increased extraction in
Country C and increased wages accordingly) of supply chains.
Several scenarios were envisioned, and each explored with the above mentioned model: the
outcome recommended strategy [18] referred to a pluralistic approach, composed by both short
and long term measures, ranging from voluntary de-centralised solutions to traditional
regulations through nation-state institutions, to tackle the widening spectrum of environmental
problems in the best way [19].
- traditional regulation is best implemented for the reduction of specific substances with
high potential for negative environmental impacts, even though they may bear high costs
in implementation and control;
- market-based instruments provide price incentives and disincentives and allow private
and public economic actors to achieve environmental objectives in a cost-effective way,
within a redesigned framework of taxes, subsidies and certificates ( preferred choice for
pursuing absolute decoupling of environmental pressures and economic development);
- additional fiscal measures to correct the above mentioned rebound effects;
- voluntary instruments can contribute towards the overall decoupling goal, as enterprises
are encouraged to take economic advantage of environmentally benign behaviour, e.g.
through cost reduction or positive marketing implications;
- integrated product policy (IPP) regarding product related policies, designed using tools
such as LCA, eco-design methods and stakeholder analysis, to enable a shift in policy
style, from an external approach (i.e. from outside the industry) to an internal approach
(i.e. from within the industry) and should be much more efficient as it will tackle the
problem [] at its origin [20].

The model both used and stressed the importance of IE related tools. In particular the knowledge
about material intensities of economic activities is a necessary precondition for the
implementation of any policy-mix, the recent EU regulatory effort reflects this [3].
The work is by no means completed, in particular SERI is currently preparing for the European
Enviromental Commission a background document on integrated environmental assessments, the
interdisciplinary process of structuring knowledge elements from various scientific disciplines
for the benefit of decision-making [21].
THE BENEFITS OF A BOTTOM-UP APPROACH
The implementation of policies primarily geared towards decoupling economic activity from
material and energy throughput can actually be conducive to economic growth.
However sustainable development will not be brought about by policies only: it must be taken up
by society at large as a principle guiding the many choices each citizen and company makes
every day. Even the previously mentioned market-based instruments may not be sufficient in
many cases, the importance of supporting voluntary behavioural changes is therefore highlighted
[22].
A properly scaled set of tools coming from the IE framework could be useful to integrate this
new behavioural pattern into companies and other subnational organizations: the holistic
approach proper of IE is therefore apt to guide the design optimization of policies and industrial
processes.
A few companies [23] already implement tools such as LCA in their SW or use MFA analysis,
also given the EU Directive 2008/1/EC (IPPC Directive) which requires comprehensive
analyses of all energy and material flows as part of the approval of new industrial installations,
and the modernization of existing ones.
New research, however, suggests that the main driver for industrial ecology initiatives is
financial gain, whilst regulation plays a smaller role [24].
A textbook example is the Kalundborg Symbiosis [25], an industrial ecosystem, where the
residual product of one enterprise is used as a resource by another enterprise, in a closed cycle,
resulting in mutual economic and environmental benefits. Kalundborgs case has developed
gradually, starting with the cooperation between Kalundborg Municipality and Statoil (then
Esso) for the supply of water to the extension of Statoils production in 1961, to a real symbiotic
relationship in 1972. Today, eight companies and a number of agricultural enterprises implement
30 exchanges of water, energy, waste heat and other by-products.
This virtuous network was not invented, nor is the result of IE analysis, but developed
organically from the bottom-up, thanks to the physical proximity of the companies and due to the
scarcity of resources, making a virtue out of necessity.
In the US, on the other hand, in 1996, the Presidents Council on Sustainable Development
(PCSD) financed the construction of several eco-industrial parks pursuing industrial symbiosis
from a bottom-down approach. Devens Regional Enterprise Zone is a good example of a
successful planned EIP in the United States [26], however these experiences also highlighted the
fact that planned symbiosis are not always successful.
GUIDING THE BOTTOM-UP APPROACH: ITALYS ACHIEVEMENTS
There is however a third way to initiate sustainable voluntary practices: sponsored by ARPAT
and Ecosistemi, and co-financed within the context of the European Union's LIFE Program,
CLOSED was a biennial project launched in November 1999. The production chains involved
in the project were paper manufacturing in Lucca, plant-flower growing in Pistoia and textile
manufacturing in Prato.
At first an already existing network of middle-sized companies was found together with the
district where the cumulative effect of the industrial processes was acting: the geographical area
not only served as a link between the companies but also became an opportunity to increase eco-
efficiency and gain from a well-developed system of environmental management. Figure 1
reports some of the possible symbiotic scenarios envisioned during the project [27], both inter
and intra-district, while Table 1 lists the main analysis steps followed within the project,
highlighting the use of IE tools[28],[29].
Table 1 - Main steps of CLOSED project district analysis
Tool/Task Goal
LCA:
- LCI through a questionnaire to selected
companies on current situation
- LCA considering impacts on non-renewable
energy, human toxicity through a weighted
system, of current and future scenario

Evaluate current cradle to grave scenarios
environmental impact
Evaluate possible symbiotic scenarios
environmental impact
MFA questionnaire on current situation to compute
indicators such as DMI and TMR (to account for
hidden flows)
Compare indicators relative to each scenario
to quantify district-wise sustainability
Environmental-economical analysis Quantify environmental costs related to
symbiosis and environmental management of
possible scenarios


Figure 1 - Symbiotic and closed-cycle scenarios explored
Italy has gained from this experience and is still pursuing symbiotic practices, favoring even
more a bottom-up approach and companies direct intervention: Ecoinnovazione Sicilia a
triennial project launched in 2011, is currently implementing a Platform for the Industrial
Symbiosis of Sicily [30]. This cooperative dynamic web-portal promotes fruitful relations
between companies from different sectors offering
- user-compiled database of interested firms, each declaring its geographical position and
I/O material and energy flows;
- database of Italian and European regulation on Industrial symbiosis concept, End-of-
waste practices etc.;
- a set of IE tools such as LCA and Ecodesign used internally as well as for the
cooperation of member firms;
- a consulting service able to recognize and exploit symbiotic opportunities, where
resources are to be intended in a broader sense (materials, waste, residual energy,
services and competence).

CONCLUSIONS

Recognition is now widespread that industrial activity plays an essential role in a sustainable
society. If development has to be pursued, environmental protection cannot exclude economic
growth. Moreover recent technological improvements have shown that eco-design of products
and processes alike can be coincident with profit increase.
Industrial Ecology has allowed policy makers to understand the relevance of voluntary
contribution of the industrial sector, and, at the same time, can help companies themselves
benefit from ecological design. It is now policy makers duty to promote good environmental
governance by offering a dynamic and flexible law framework to adapt to the new opportunities
green design practices can offer (e.g. clarifying by-products sale conditions and protocol).






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