A New Materials Economy

Lester R. Brown
December 5, 2006

In nature, one-way linear flows do not long survive. Nor, by extension, can they long survive in the expanding economy that is a part of the earth”™s ecosystem. The challenge is to redesign the materials economy so that it is compatible with nature. The throwaway economy that has been evolving over the last half-century is an aberration, now itself headed for the junk heap of history.

The potential for reducing materials use has been examined over the last decade in three specific studies. The first–Factor Four, by Ernst von Weizsäcker, an environmentalist and leader in the German Bundestag–argued that modern industrial economies could function very effectively with a level of virgin raw material use only one fourth that of today. This was followed a few years later by research from the Factor Ten Institute organized in France under the leadership of Friedrich Schmidt-Bleek. It concluded that resource productivity can be raised by a factor of 10, which is well within the reach of existing technology and management, given the appropriate policy incentives.

In 2002, American architect William McDonough and German chemist Michael Braungart teamed up to coauthor a book entitled Cradle to Cradle: Remaking the Way We Make Things. Waste and pollution are to be avoided at any cost. “œPollution,” says McDonough, “œis a symbol of design failure.”

One of the keys to reducing materials use is recycling steel, the use of which dwarfs that of all other metals combined. Steel use is dominated by the automobile, household appliance, and construction industries. Among steel-based products in the United States, automobiles are the most highly recycled. Cars today are simply too valuable to be left to rust in out-of-the-way junkyards.

The recycling rate for household appliances is estimated at 90 percent. For steel cans, the U.S. recycling rate in 2003 of 60 percent can be traced in part to municipal recycling campaigns launched in the late 1980s.

In the United States, roughly 71 percent of all steel produced in 2003 was from scrap, leaving 29 percent to be produced from virgin ore. Steel recycling started climbing more than a generation ago with the advent of the electric arc furnace, a method of producing steel from scrap that uses only one third the energy of that produced from virgin ore. And since it does not require any mining, it completely eliminates one source of environmental disruption. In the United States, Italy, and Spain, electric arc furnaces used for recycling now account for half or more of all steel production.

It is easier for mature industrial economies with stable populations to get most of their steel from recycled scrap, simply because the amount of steel embedded in the economy is essentially fixed. The number of household appliances, the fleet of automobiles, and the stock of buildings is increasing little or not at all. For countries in the early stages of industrialization, however, the creation of infrastructure–whether factories, bridges, high-rise buildings, or transportation, including automobiles, buses, and rail cars–leaves little steel for recycling.

In the new economy, electric arc steel minimills that efficiently convert scrap steel into finished steel will largely replace iron mines. Advanced industrial economies will come to rely primarily on the stock of materials already in the economy rather than on virgin raw materials. For metals such as steel and aluminum, the losses through use will be minimal. With the appropriate policies, metal can be used and reused indefinitely.

In recent years, the construction industry has begun deconstructing old buildings, breaking them down into their component parts so they can be recycled and reused. For example, when PNC Financial Services in Pittsburgh took down a seven-story downtown building, the principal products were 2,500 tons of concrete, 350 tons of steel, 9 tons of aluminum, and foam ceiling tiles. The concrete was pulverized and used to fill in the site, which is to become a park. The steel and aluminum were recycled. And the ceiling tiles went back to the manufacturer to be recycled. This recycling saved some $200,000 in dump fees. By deconstructing a building instead of simply demolishing it, most of the material in it can be recycled.

Germany and, more recently, Japan are requiring that products such as automobiles, household appliances, and office equipment be designed so that they can be easily disassembled and their component parts recycled. In May 2001, the Japanese Diet enacted a tough appliance recycling law, one that prohibits discarding household appliances, such as washing machines, televisions, or air conditioners. With consumers bearing the cost of disassembling appliances in the form of a disposal fee to recycling firms, which can come to $60 for a refrigerator or $35 for a washing machine, the pressure to design appliances so they can be more easily and cheaply disassembled is strong.

With computers becoming obsolete every few years as technology advances, the need to be able to quickly disassemble and recycle them is a paramount challenge in building an eco-economy.

In addition to measures that encourage the recycling of materials are those that encourage the reuse of products such as beverage containers. Finland, for example, has banned the use of one-way soft drink containers. Canada”™s Prince Edward Island has adopted a similar ban on all nonrefillable beverage containers. The result in both cases is a sharply reduced flow of garbage to landfills.

A refillable glass bottle used over and over requires about 10 percent as much energy per use as an aluminum can that is recycled. Cleaning, sterilizing, and relabeling a used bottle requires little energy, but recycling cans made from aluminum, which has a melting point of 660 degrees Celsius (1,220 degrees Fahrenheit), is an energy-intensive process. Banning nonrefillables is a win-win-win option–cutting material and energy use, garbage flow, and air and water pollution.

There are also transport fuel savings, since the containers are simply back-hauled to the original bottling plants or breweries. If nonrefillable containers are used, whether glass or aluminum, and they are recycled, then they must be transported to a manufacturing facility where they can be melted down, refashioned into containers, and transported back to the bottling plant or brewery.

Even more fundamental than the design of products is the redesign of manufacturing processes to eliminate the discharge of pollutants entirely. Many of today”™s manufacturing processes evolved at a time when the economy was much smaller and when the volume of pollutants was not overwhelming the ecosystem. More and more companies are now realizing that this cannot continue and some, such as Dupont, have adopted zero emissions as a goal.

Another way to reduce waste is to systematically cluster factories so that the waste from one process can be used as the raw material for another. NEC, the large Japanese electronics firm, is one of the first multinationals to adopt this approach for its various production facilities. In effect, industrial parks are being designed, both by corporations and governments, specifically to combine factories that have usable waste products. Now in industry, as in nature, one firm”™s waste becomes another”™s sustenance.

Government procurement policies can be used to dramatically boost recycling. For example, when the Clinton administration issued an Executive Order in 1993 requiring that all government-purchased paper contain 20 percent or more post-consumer waste by 1995 (increasing to 25 percent by 2000), it created a strong incentive for paper manufacturers to incorporate wastepaper in their manufacturing process. Since the U.S. government is the world”™s largest paper buyer, this provided a burgeoning market for recycled paper.

New technologies that are less material-dependent also reduce materials use. Cellular phones, which rely on widely dispersed towers or on satellites for signal transmission, now totally dominate telephone use in developing countries, thus sparing them investment in the millions of miles of copper wires that the industrial countries made.

One industry whose value to society is being questioned by the environmental community is the bottled water industry. The World Wide Fund for Nature, an organization with 5.2 million members, released a study in 2001 urging consumers in industrial countries to forgo bottled water, observing that it was no safer or healthier than tap water, even though it can cost 1,000 times as much.

WWF notes that in the United States and Europe there are more standards regulating the quality of tap water than of bottled water. Although clever marketing in industrial countries has convinced many consumers that bottled water is healthier, the WWF study could not find any support for this claim. For those living where water is unsafe, as in some Third World cities, it is far cheaper to boil or filter water than to buy it in bottles.

Phasing out the use of bottled water would eliminate the need for billions of plastic bottles and the fleets of trucks that haul and distribute the water. This in turn would eliminate the traffic congestion, air pollution, and rising carbon dioxide levels from operating the trucks.

A brief review of the environmental effects of gold mining raises doubts about whether the industry is a net benefit to society. In addition to the extensive release of mercury and cyanide into the environment, annual gold production of 2,500 tons requires the processing of 750 million tons of ore–second only to the 2.5 billion tons of ore processed to produce 1 billion tons of raw steel.

Over 80 percent of all the gold mined each year is used to produce jewelry that is often worn as a status symbol, a way of displaying wealth by a tiny affluent minority of the world”™s people. Birsel Lemke, a widely respected Turkish environmentalist, questions the future of gold mining, wondering whether it is worth turning large areas into what she calls “œa lunar landscape.” She is not against gold per se, but against the deadly chemicals–cyanide and mercury–that are released in processing the gold ore.

To get an honest market price for gold means imposing a tax on it that would cover the cost of cleaning up the mercury and cyanide pollution from mining plus the costs of landscape restoration in mining regions. Such a tax, which would enable the price of this precious metal to reflect its full cost to society, would likely raise its price severalfold.

Another option for reducing the use of raw materials would be to eliminate subsidies that encourage their use. Nowhere are these greater than in the aluminum industry. For example, a study by the Australia Institute reports that smelters in Australia buy electricity at an astoundingly low subsidized rate of 0.7″1.4¢ per kilowatt-hour, while other industries pay 2.6″3.1¢. Without this huge subsidy, we might not have nonrefillable aluminum beverage containers. This subsidy to aluminum indirectly subsidizes both airlines and automobiles, thus encouraging travel, an energy-intensive activity.

The most pervasive policy initiative to dematerialize the economy is the proposed tax on the burning of fossil fuels, a tax that would reflect the full cost to society of mining coal and pumping oil, of the air pollution associated with their use, and of climate disruption. A carbon tax will lead to a more realistic energy price, one that will permeate the energy-intensive materials economy and reduce materials use.

The challenge in building an eco-economy materials sector is to ensure that the market is sending honest signals. In the words of Ernst von Weizsäcker, “œThe challenge is to get the market to tell the ecological truth.” To help the market to tell the truth, we need not only a carbon tax, but also a landfill tax so that those generating garbage pay the full cost of getting rid of it.

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Adapted from Chapter 12, “œBuilding a New Economy,” in Lester R. Brown, Plan B 2.0: Rescuing a Planet Under Stress and a Civilization in Trouble (New York: W.W. Norton & Company, 2006), available on-line at www.earthpolicy.org/Books/PB2/index.htm

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