Alright guys, after a bit of a hiatus, I'm about to start a series of posts focused on the economics of energy and "Going Green." As a reference, I'll be using the book, "Environmental and Natural Resource Economics," by Jonathan Harris. I would also recommend taking the class of the same name at Mines, or any other class related to environmental economics.
And here we go... Industrial Ecology
Right now, much of the US and other developed countries are focused on recycling because of the efficiency of it and the need for precious raw materials. Well, industrial ecology is essentially the large scale version of recycling. Instead of the straight-line approach to industry, where you go from raw materials, to production, to final product, to waste, industrial ecology takes advantage of a loop. Below is an example of industrial ecology in Kalundborg, Denmark.
The entire goal of industrial ecology is to turn the wastes produced in industry into inputs for another industrial process. As you can see in this city in Denmark, the excess steam produced from the coal power plant is distributed to the town to heat homes and also the oil refinery. The oil refinery utilizes this steam, and its excess gas is given to the power plant as well as the wallboard factory. This process of recycling wastes into inputs is utilized throughout the town. Unfortunately, not all cities are setup like Kalundborg, so this circular process of industrial ecology is not always possible.
However, we can learn from this example and implement recyclying methods such as dematerialization, materials substitution, remanufacturing, and waste mining. In order for these policies to be economically viable, the government must enforce policies such as taxes and subsidies. In the case of waste mining, which is the recovery of low-value byproducts and wastes for use as industrial raw materials, government policy must be used to internalize the costs of generating wastes (tax would be used here) or to encourage their reuse (subsidy). As you will see in future posts, the government plays a huge role in making "green" a reality.
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