Friday, September 14, 2007

Sustaining Junk

In college, I studied economics and environmental science and policy. The two disciplines are very rarely harmonized, and people who think seriously about sustainability from an ecological perspective have been able to challenge a lot of assumptions core to economic modeling. When we consider the global ecological system, we are forced to account for behaviors, constraints, and outcomes that are generally ruled out-of-bounds for the purpose of economic decision making - for example, performing cost-benefit calculations and making rational choices where the consequence must be spread over long time horizons, recognizing and valuing all externalities in a system, creating an accounting system for resources, like air and water, than aren't traditionally paid for with money, but which are fundamental to all economic transactions, understanding scarcity in situations like extinction, and so on.

For all the challenges that environmental thinking can pose to economics, a key vexing question that economics posed to ecological systems was the ability of the market, through demand, competitive advantage, and ultimately price, to foster technology innovations that would, at the right time and over time, allow us to address environmental problems through technological solutions. A key example of this has always been in energy, where one line of thinking projects that, as soon as the market conditions exist that make innovation in alternative energy feasible, that market need will be filled. And perhaps we are seeing the beginnings of such a set of innovations in green energy today.

A recent article got me thinking again about this issue:
In an act of macroeconomic karma, materials thrown out by Americans—broken-down auto bodies, old screws and nails, paper—accounted for $6.7 billion in exports to China in 2006, second only to aerospace products. Junkyards may conjure up images of Fred Sanford's ratty collection of castoffs. But these days, scrap dealers are part of a $65 billion industry that employs 50,000 people, who together constitute a significant arc of a virtuous circle. The demand of China's factory bosses for junk—which they recycle to make all the junk Americans buy from China—creates jobs, tamps down the growth of the trade deficit, and might help save the planet.
Is it possible that one nation's folly in managing resources can be another nation's opportunity, and that on a global scale, the market will be efficient in distributing resources (and managing the impact on those natural resources need to sustain economies and fuel innovation?) It seems folly to blindly say yes, although I believe many business decision makers believe this to be true, if not in this exact framing, then as evidenced by the way they behave.

Where this strikes me as folly is that it fails to create the right incentives, culture, or organization (switching from economics to business) to address more efficient use of resources. It puts us in the wishful position of hoping that the market will create conditions to clean up its mess, rather than avoiding the mess in the first place. Put another way, it puts the burden of sustainability on policy makers, influencing the outcomes of a business system, rather then as a design challenge, influencing the initial objectives and processes of the system.

It is as a design challenge that sustainability becomes a truly influential idea for business and the economy, and while I'd like to return in further detail to this topic, I will leave off by highly recommending you watch the Bill McDonough video hosted on the TED site, above, as well as reading a bit about McDonough's Cradle 2 Cradle design philosophy - which can be consumed as a very interesting book (in both the intellectual and physical sense, the book itself having been designed according to the Cradle 2 Cradle principles), as well as on many websites, including McDonough's own website.


Anonymous said...

To describe China as a recycler is slightly generous. China needs all commodities, in any form, to feed its factories. The same impulse that makes it want to melt down scrap also leads to strip mining in Africa. And so on. That scrap would have been used in the U.S., if it still had an industrial base.

Eli said...

Post is right on -- don't just wait for the market to fix things at the back end.

I think you may have blogged about this before, but the documentary "Manufactured Landscapes" does a great job of visually depicting waste and showing the lifecycle of products that we forget about after putting them in a bin of some sort or other. The photographer shows how computer chips are mined for valuable metals in a small Chinese city, marine vessels made into scrap in a bangladeshi port. Along with the long lines of cheap Clothing Irons hanging in a Chinese factory, you get a real sense of the weight of all the "stuff" we buy and eventually throw away.

Watch the trailer here:

Manufactured landscapes
(link in blue text in middle of page)

About the policy issues -- it seems that some strong govt policies could give a little push to the product manufacturers to build sustainability into their designs.
I don't know the details, but hasn't the European Union made some progress on this front, requiring mfctrs to pay recycling costs, etc.?

Ritik Dholakia said...

Anon -

Agreed. I don't mean to characterize China as a recycler. The interesting issue posed by the Slate article, for me, is whether economic forces (i.e., China's needs for cheap material inputs, fueled by China's ability to apply both lower cost labor and manufacturing practices to produce goods from industrial scrap) can, or perhaps more precisely, necessarily will correct for inefficiencies of previous market cycles (i.e., the inability of the American economy to deal with that junk in the first place).

My instinct is to say, no, this is not something we can rely upon -- and this is what brings me back to McDonough's excellent work. Instead of framing the external, negative impacts of economic activity as a remnant left to government policy or future market cycles to fix, McDonough frames these same impacts as design problems that need to be addressed at the start of a business process. In doing so, you can make both a business case (a real, dollars-in-pocket case, not a hypothetical one) for addressing economic externalities while also presenting the solution, via systems-driven product design, to the problem.

Ritik Dholakia said...

Eli -

I've seen the documentary you are talking about, it is very interesting. And all of this discussion without bringing in any questions of equality or justice, of course, which becomes a stark question when you see the actual working conditions required to reclaim so much of this junk.

As a side note, I picked up Mike Davis' Planet of Slums for my subway ride home today -- I'm sure I'll have more to say about that on another day, but what caught my imagination about that book was the fact that so much of current urbanization trends are, in fact, not driven by economic development in cities -- creating exactly the sort of chronically underemployed populations that make the sort of work described in the Slate article possible. Brutal, grueling work, but an economist would argue that it is work that simultaneously addresses two social problems: the environmental externality of trash and unemployment. Again, my instinct is to disagree, but there is something to it.

As far as your last point, clearly government has a role in fostering the sort of economic approaches that McDonough advocates -- and it is interesting the extent to which countries like Brazil and China, through either extraordinary vision or extraordinary need, are the countries that are stepping up and taking the lead...