The Case for Private Planning
by Pierre Desrochers
Industrial ecologists are championing eco-industrial parks or EIPs as tools for pursuing sustainable development. An EIP is a community of companies located in one region that exchange and make use of each other’s by-products or energy. Among the best known is Kalundborg, Denmark, a city in which the major industries and the local government trade their waste streams and energy resources.
Many commentators see Kalundborg as a model that should be copied and improved upon. “Imagine what a team of designers could come up with if they were to start from scratch, locating and specifying industries and factories that had potentially synergistic and symbiotic relationships,” writes Paul Hawken (1993, 63), author of The Ecology of Commerce. Ernest A. Lowe (1997, 58) points out that “while industrial ecosystems must be largely self-organizing, there is a significant role for an organizing team in educating potential participants to the opportunities and in creating the conditions that support the development.” Because of this enthusiastic endorsement, numerous EIPs have been planned in North and South America, Southeast Asia, Europe and Southern Africa (Ayres 1996; Indigo Development 1998; Gertler 1995; Lowe 1997).
Kalundborg, a small city on the island of Seeland, 75 miles west of Copenhagen, is indeed an impressive example of a recycling network. In this city of 20,000, the four main industries–a coal-fired power plant (Asnæs), a refinery (Statoil), a pharmaceuticals and enzymes maker (Novo Nordisk), a plasterboard manufacturer (Gyproc), as well as the municipal government and a few smaller businesses–feed on each others’ wastes, in the process turning them into useful inputs.
The Asnæs power company supplies residual steam to the Statoil refinery and, in exchange, receives refinery gas that used to be flared as waste. The power plant burns the refinery gas to generate electricity and steam. It sends excess steam to a fish farm that it operates, to a district heating system serving 3,500 homes, and to the Novo Nordisk plant. Sludge from the fish farm and pharmaceutical processes becomes fertilizer for nearby farms. The power plant sends fly ash to a cement company, while gypsum produced by the power plant’s desulfurization process goes to a company that produces gypsum wallboard. Finally, the Statoil refinery removes sulfur from its natural gas and sells it to Kemira, a sulfuric acid manufacturer.
However, consultants did not design, nor did Danish government officials finance, Kalundborg’s industrial symbiosis. It was, rather, the result of many separate bilateral deals between companies searching to reduce waste treatment and disposal costs and to gain access to cheaper materials and energy while generating income from production residue. Kalundborg, like other similar examples, developed entirely through market forces (Garner and Keoleian 1995; Gertler 1995; Lowe et al. 1996; Schwartz and Steininger 1997). Today, there is still no higher level of administration managing the interaction of Kalundborg companies and local government. (Lowe 1997, 59). Jorgen Christensen, a spokesperson for Novo Nordisk, notes: “I was asked to speak on ‘how you designed Kalundborg.’ We didn’t design the whole thing. It wasn’t designed at all. It happened over time” (Lowe 1995, 15).
This essay shows that the movement toward public planning of eco-industrial parks rests on a misreading of the Kalundborg experience. Kalundborg is not unique but rather is characteristic of industrial loops that cities have fostered for hundreds and even thousands of years. To assume that EIP planners can replicate and improve upon Kalundborg reflects insufficient knowledge of how market forces have historically promoted resource recovery.
This essay compares private and public mechanisms in the development of industrial loops and illustrates how regulation of hazardous waste in the United States currently thwarts such industrial symbiosis. The essay concludes by arguing that greater reliance on market forces would be the most effective way of replicating the Danish experience.
Pierre Desrochers is a senior research fellow at the Institute for Policy Study at Johns Hopkins University. He received his Ph.D. in geography from the University of Montreal in January 2000. He has a master’s degree in urban studies from the National Institute of Scientific Research in Montreal and a B.A. in political science from the University of Montreal. After learning of informal recycling networks in the Montreal area, Desrochers developed an interest in the emerging field of industrial ecology and received a Mitchell Prize Young Scholar Award from the Houston Advanced Research Center for a paper on resource recovery. He wrote “Eco-Industrial Parks: The Case for Private Planning” as a graduate fellow at PERC during the summer of 1999. He was named PERC’s 1999 William S. Broadbent Fellow in recognition of the quality of his work.
“Eco-Industrial Parks: The Case for Private Planning” by Pierre Desrochers is the first in a new series of studies that expand the outreach of the Political Economy Research Center (PERC). These papers, written by PERC fellows, associates, and colleagues, are designed to give scholars and policy analysts background for understanding today’s environmental policy issues. More academic than our PERC Policy Series papers, these studies illustrate PERC’s ongoing commitment to high-quality, policy-relevant research.