Systemic sustainability: concepts and strategies for overcoming resource depletion and environmental degradation

Simon Chun Kwan Chui

A thesis submitted in fulfilment of the requirements for the degree of Master of Architecture, The University of Auckland, 2007.

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Abstract

This thesis seeks to understand and find solutions to two of the most pressing problems in the contemporary world, resource depletion and environmental degradation, both of which are results of the massive and pervasive industrialisation of human activity. The thesis begins with a discussion of the successes and flaws of industrialism. Industrialism is a phenomenon that inherently optimises labour productivity and neglects future environmental constraints until they are unavoidably apparent. The result is that industrialism has simultaneously dramatically improved human prosperity and caused dramatic environmental damage. This thesis briefly summarises four fields of sustainability study that have emerged to address the shortcomings of industrialism, looking for ways to eliminate its propensity for environmental damage while retaining its ability to provide prosperity to humanity.

The four fields are environmental

economics, industrial ecology, sustainable urbanism and lean management, covering many facets of the phenomenon of industrialism and a diversity of concerns. A close look at the four fields reveals some commonalities in their assumptions and strategies, in particular: the need to maintain a whole-system perspective to avoid dysfunctional isolation that comes with the uncritical application of the division of labour; the use of networked modularity as an organisational principle to overcome rigid and unresponsive management hierarchies and to give systems the flexibility to change and adapt, and; the application of pervasive knowledge enabled by information technologies to better control processes and capture system externalities.

These commonalities

challenge the fundamental assumptions underlying industrialism, pointing towards a culture of systemic sustainability that will replace the existing culture of systemic consumerism. Finally, this thesis briefly discusses some outcomes that can be expected, should the ideas in this thesis be applied. As a whole, this thesis seeks to contribute to humanity’s transition from the current self-destructive form of industrialism to a form that is sustainable and viable in the long term.

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Dedication

This work is dedicated

To those who learn and those who teach,

To those who caution and those who encourage,

To those who challenge and those who succour.

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Preface

This thesis grew out of a concern that the discipline of architecture may not be adequately addressing its responsibility to humanity. While the world heads inexorably towards impending resource and environmental disaster, in the form of fossil fuel depletion and global climate change, it seems the only response from the architecture discipline is to adopt “green” building technologies.

What is architecture doing

fundamentally to enable and promote sustainable behaviour and sustainable thinking? Green building technologies, while heading in the right direction, are a surface approach to a very deep problem.

This thesis engages disciplines outside of architecture in order to discover how they address the problem of humanity’s current direction. Ultimately, the world revolves around money, which is premised on material production and productivity, which is currently faced with resource and environmental constraints. With the outcomes of this thesis, it is possible to say to an architect, “we need spaces that allow specialisation but which do not promote isolation”, “we need spaces and enable a modular organisation based on semi-autonomous multi-skilled work cells”, and “we need integrated data collection and feedback systems that allow management to be highly automated and responsive”. These are still difficult problems, but they are now design problems beyond the mere application of green technologies. The shift in mindset is profound.

A paper based on this thesis was presented to the Australia New Zealand Systems Conference 2007, a multidisciplinary gathering of academics and practitioners dealing with complex systems and contemporary problems. I personally would like to thank Dr. Ross Jenner for supervising my Master of Architecture thesis, and I would like to thank my peers and my own students for the many interesting questions and discussions.

Simon Chun Kwan Chui. 10th December 2007. Auckland, New Zealand

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Table of Contents

Abstract ............................................................................................. ii Dedication .........................................................................................iii Preface............................................................................................. iv Table of Contents.............................................................................. v 1. Introduction ................................................................................... 1 2. The problem: The status quo is not viable .................................... 6 2.1. Industrialisation .................................................................................7 2.1.1. Mass production: Triumph of human industry ......................7 2.1.2. Profit, or liquidating capital...................................................9 2.2. Resource depletion..........................................................................13 2.2.1. The one way street of consumption ...................................13 2.3. Environmental Degradation .............................................................16 2.3.1. The forecast: Global ecological collapse ...........................16 2.4. The technology paradox ..................................................................20

3. The responses: Paradigm shifting............................................... 23 3.1. Environmental economics ...............................................................24 3.1.1. Externalities and imperfect knowledge ..............................24 3.1.2. Full cost accounting (but how full?)....................................27 3.1.3. Incentives and disincentives ..............................................29 3.1.4. Products and Services .......................................................32 3.2. Industrial ecology.............................................................................35 3.2.1. The (idealised) ecological metaphor ..................................35 3.2.2. No wastes, only misallocated resources ............................38 3.2.3. How to sell rubbish ............................................................42 3.2.4. A marketplace of residues .................................................44 3.3. Sustainable urbanism ......................................................................47 3.3.1. Sprawl: what we want versus what we can afford..............47 3.3.2. Consumerist urbanism versus sustainable urbanism.........50

vi 3.3.3. Time, space, materials and energy....................................53 3.3.4. Communities and civilisation..............................................58 3.4. Lean organisation management ......................................................62 3.4.1. The semi-autonomous cell.................................................62 3.4.2. Metrics ...............................................................................65 3.4.3. SIPOC and Kanban ...........................................................67 3.4.4. Lean culture and continuous improvement ........................70

4. Common themes for a systemic sustainability ............................ 73 4.1. Whole-system perspective ..............................................................74 4.1.1. Trans-boundary outlook .....................................................74 4.1.2. Inclusivity of ownership ......................................................77 4.1.3. Customer Success.............................................................80 4.1.4. Suppliers – inputs – process – outputs – customers..........82 4.2. Networked modularity......................................................................84 4.2.1. Decentralisation and consolidation ....................................84 4.2.2. Connectivity and interdependence.....................................87 4.2.3. Non-linearity.......................................................................89 4.2.4. Redundancy and upgradability ..........................................92 4.3. Pervasive knowledge.......................................................................94 4.3.1. Integrated data collection...................................................94 4.3.2. Feedback systems.............................................................96 4.3.3. Embedded utility and information.......................................99 4.3.4. Automated management..................................................101

5. Sustainable patterns manifest................................................... 103 6. Conclusion ................................................................................ 108 Bibliography .................................................................................. 112

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1. Introduction

Humanity is approaching a critical point in its history. In recent centuries, the scope of humanity’s activities and its impact on the planet has grown exponentially, and in recent decades it has become unavoidably clear that we are fast approaching fundamental environmental limits in the form of resource depletion and environmental degradation (Bringezu 2003: 20-21, Dale 2006: 3-4, Hawken, et al. 1999: 7-8, Graedel, et al. 1995: 47). The capacity of our planet to accommodate human activity is finite, and for the foreseeable future it is the only planet we can realistically appropriate and exploit. Thus, we are challenged in our time with the task of devising and adopting a system of human development that is sustainable and does not compromise the development of future generations by irreversibly depleting resources and degrading the environment.

This thesis begins with a discussion of the nature of industrialism, in particular the relationship between the success of the industrial revolution and the resulting degradation of the environment. The success of industrialism is based on the systematic application of the division of labour and the use of machine tools to dramatically increase labour productivity (Smith 1979: 110-15, Womack, et al. 1991: 12-13). The reciprocal of this success is a dramatic increase in the material and energy throughput of the human industrial system.

While the industrial system provides incentives to

constantly improve material and energy productivity, efforts in these directions have not benefited from the kind of revolutionary paradigm-shift that has occurred with labour productivity. At the beginning of the industrial revolution, human labour was relatively scarce compared to material and energy resources, especially as fossil fuels were just beginning to be exploited at a significant scale. In this situation, it was a reasonable, though short-sighted, response to increase the exploitation of material and energy resources while conserving labour resources. However, in our contemporary world, the overwhelming success of industrialism has resulted in a situation where material and energy limitations are increasingly of greater concern than labour limitations, while a heretofore unconsidered and indispensable resource, the planet’s biosphere as a lifesupport system, has been subjected to degradation and liquidation. The conclusion is

2 that, in order to seriously tackle the sustainability problem, it is necessary to address the fundamental labour-productivity bias of our industrial system and to devise similar revolutionary paradigm-shifts in how we consider resource productivity, energy productivity, and the planet’s ecological capital (Graedel, et al. 1995: 93-94, Graedel 1994: 23-26, Bringezu 2003: 22).

Following this, the thesis will discuss four developing fields of sustainability study, specifically environmental economics, industrial ecology, sustainable urbanism and lean management, each addressing different aspects of the sustainability question. Environmental economics considers the presence and effects of externalities1 to the industrial system, especially the gaps in consideration for the real value of environmental and social factors within the framework of the economic system. While the economic system is effective in its definition of the relative worth of labour, capital and material resources through monetary values, it has great difficulty itemising such factors as ecological damage, pollution emission and social cohesion, even though these factors have obvious direct and indirect impacts on the functioning of the economic system (Graedel, et al. 1995: 85-86). Proper management of these neglected factors cannot occur until they are internalised into the economic system, and this is the goal of environmental economics.

Industrial ecology questions the linear, resource-to-waste model of industrialism that begins with the extraction of raw materials and ends with the burial of wastes into the ground or its discharge into the atmosphere or waterways. Such a model is plausible for individual organisms but not for whole ecosystems. As human industry has expanded to become the largest or even the dominant metabolism in many environments, it needs to transition from the linear model to a cyclic ecosystem-like model where materials cycle endlessly through different processes within the system. Industrial ecology takes its cue from natural ecosystems where all material interactions, like food webs, carbon and nitrogen cycles, and hydrological systems, are overwhelmingly cyclic and where the very concepts of “raw material” and “waste” do not apply (Bringezu 2003: 20, Erkman 2003: 338-39, Hawken, et al. 1999: 10).

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For a discussion of externalities, see section 3.1.1. “Externalities and imperfect knowledge” of this thesis.

3 Sustainable urbanism takes a critical view of human development patterns, with particular disapproval for low-density, sprawling, automobile-dependent, single-use developments. While people tend to perceive low-density developments to be more attractive and liveable than high-density alternatives, such settlement patterns consume vast amounts of land, require greater investment in infrastructure to derive equivalent services, and incur higher running costs due to the long physical distances between land uses. The problem is that reasonable decisions made by many individuals, from each individual’s isolated perspective, seldom aggregate into an optimal system. Sustainable urbanism advocates a more holistic approach to human development (Real Estate Research Corporation., et al. 1974: 6, Grant 2006: 55-63, Burchell, et al. 1998: 1-3).

Lean management addresses the dysfunctional rigidity and lack of responsiveness that comes with the fine subdivision of large, complex tasks. While the division of labour allows the simplification and automation of individual manual tasks, it also requires the effective coordination of a large number of people and processes, resulting in massive management hierarchies that, due to their size and complexity, tend to lack agility and flexibility. The costs of this rigidity come in not being able respond to unanticipated circumstances quickly and not being able to quickly adopt better technologies and methodologies as they become available, resulting in the perpetuation of unsustainable practices.

The purpose of lean management is to increase system flexibility by

dramatically reducing the need for large management hierarchies via a strategy of decentralisation and management automation (Womack, et al. 1991: 49-68, Swamidass and Darlow 2000: 18-20, Black 2000: 177-78, Feld 2001: 3-6).

While the four fields are disparate in their concerns and approaches, they all address contemporary industrialism by addressing its fundamental shortcomings. The third chapter of this thesis looks at the strategies and assumptions adopted by the four fields in an attempt to find the kind of paradigm-shift that would be necessary to solve the sustainability problem. Three major themes are identified: whole-system perspective; networked modularity, and; pervasive knowledge.

The issue of whole-system

perspective is a response to the fragmentation and functional isolation that comes with the uncritical pursuit of the division of labour, and it is primarily concerned with enabling useful communication and collaboration between system elements while still

4 maintaining the benefits of specialisation.

Networked modularity is a model for

systematically decentralising management responsibility and automating decisionmaking processes by arranging processes into modules that function autonomously, flexibly reacting to changing contexts. Pervasive knowledge is concerned with the use of information technologies to monitor and control processes with a speed and precision that previously has been impossible, reducing the possibility for externalities to exist. These three concepts underlie the critical re-evaluation of industrialism by the four fields, and they stand in contrast to the self-destructive assumptions that industrialism has long relied on and taken for granted.

The final chapter of this thesis briefly explores the implications of these concepts of sustainability and how they may manifest in practice.

The characteristics of a

sustainable system can be expected to be density, diversity, and interconnectivity, along with mechanisms that enable useful specialisation, mechanisms to facilitate useful communication and transactions, and mechanisms that highlight and make accessible all information pertaining to flows of materials, energy, and information.

Density,

diversity and interconnectivity are the fundamental features that enable specialisation and the division of labour and which, in themselves, do not cause any problems. The mechanisms for communication and visibility of transactions are geared towards preventing functional isolation and externalities, which are the outcomes of uncritical specialisation. The point is made that sustainability is not about being “green” or placing people “close to nature” in the straightforward sense. Rather the transactions between human industrialism and natural processes will need to be much more considered and controlled, with the result that humans will, in fact, have practically no unmediated and unconsidered interactions with “nature”.

As a whole, this thesis aims to address the question of sustainability, first by coming to terms with the nature of industrialism and contemporary human development, understanding how it leads to the situation we are currently in, and finally considering what changes may be made in order to answer the problems. This thesis focuses heavily on an Anglo-American paradigm of capitalist industrialism, and not unreasonably so, considering the pre-eminence of American industrial and economic power in today’s world, the successes of post-war Japan based on the same industrialist

5 principles adapted to their specific cultural context, the collapse of the Soviet Union invalidating its state-controlled socialist model, and the recent resurgence of China following much the same capitalist industrialist development path devised by the European industrial revolution come two and a half centuries ago. The American model of industrialism is currently the world’s template for economic power and social development.

The fact that humanity has known for decades that this form of

industrialism is ultimately unsustainable, and yet has been heretofore unable to halt and reverse the self-destructive trends, suggest that the causes of our unsustainability is embedded deep in the foundations of industrialism and cannot be wholly addressed by applying surface remedies. This presents a major difficulty for humanity, but not an insurmountable one, for just as the division of labour and the utilisation of machine tools led to a complete redefinition of what humanity is and what it does, it is possible to find other paradigm-shifting ideas that will have the same amount of impact. This thesis is a part of the search for those ideas.

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2. The problem: The status quo is not viable

This chapter provides a brief review of the rise of industrialism, discussing its rationale and the benefits it has provided humanity, as well as its costs in resource depletion and environmental degradation.

The role of technology is not a simple one: from

technological advances come all of the benefits of industrialisation, but also all of the costs, while our ability to effectively mitigate those costs will also involve further technological advances. Technology is the tool with which we do what we do, and it is what we choose to do with our tools that will determine the outcomes of our actions.

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2.1. Industrialisation The world as we know it is the outcome of a process commonly referred to as industrialisation. At its essence, industrialisation is a series of mutually supporting technological innovations that changed human activity from being predominantly agrarian to predominantly industrial (Grübler 1994: 41). Industrialism is so pervasive that success and failure, good fortune and disaster in our contemporary world are defined by and dependent upon it. Manufacturing activity and productivity increases form the basis of the global economy.

Any significant mismatch between real

productivity and economic activity, such as the results of property or stock market speculation, is unstable and inevitably ends with a realignment of the economy to reflect real production (Tan 2001: 17-31). In an industrial world, socio-economic success flows from technology applied to material production to increase labour productivity (Kam 2001: 35-68, Swamidass 2000: 4)

2.1.1. Mass production: Triumph of human industry

In 1776, Adam Smith, widely considered the father of modern economics, published The Wealth of Nations (Smith 1979). In discussing the causes behind the relative wealth and poverty between nations and between individuals in an industrialising Europe, the first phenomenon he addressed was the division of labour that enabled mass-production. The example he cited was that of the pin-maker. A person, not particularly skilled and working alone, would struggle to make about a dozen pins in a day. However, in Smith’s time, the work of pin-making was conducted in workshops, each staffed by about ten workers, and the task of making the pins was divided into some eighteen steps, such as drawing the wire, cutting it, sharpening it, making the pinhead, attaching the pinhead, etc. The ten workers, each focused on a small number of tasks, would between them make some forty-eight thousand pins in a day, or four thousand eight hundred pins per person. This is more than the dozen pins made by a person alone by a factor of 400 (Smith 1979: 109-10).

8 Smith observes that this increase in labour productivity is the result of three effects of the division of labour. Firstly, in subdividing work into a small number of specialised tasks and assigning them to specialised workers, each worker would become much more proficient at the task as repetition and practice improved their manual dexterity. Secondly, in dedicating each worker to a single task, the worker does not spend any time moving between tasks, nor is it necessary to spend time gathering and putting away tools or rearranging the workspace to accommodate different tasks. Thirdly, with the fine subdivision of labour, it is possible to invent and utilise specialised tools and machines that are specially optimised for specific tasks, in the same way as the specialised worker who is extremely proficient at a single task but unable to perform the other tasks with proficiency. In this way, highly specialised workers work together to produce more than they could possibly do individually, and collectively become wealthier as a result (Smith 1979: 110-15, Womack, et al. 1991: 12-13).

Wherever such subdivision of labour was possible, affluence was the result. Because such division of labour is only possible where there are enough people to perform each of the minutely divided tasks, and because there is little point in increasing productivity if there is no market for the increased production, division of labour happened most readily in cities, with their high population densities, and on coasts or navigable rivers which, in Smith’s day, was the infrastructure to transport the goods to distant markets (Smith 1979: 117-23). As the industrialisation of cities proceeded, its effects would be felt in the surrounding rural areas as a result of the larger and more diverse city marketplace that the rural areas could now access, in the availability of capital from the cities which could be invested in the rural lands, and in the development of new technologies in the cities which could be applied to rural agricultural production (Smith 1979: 507-08).

Greater agricultural output enabled even greater concentrations of

people in the cities, which enabled even greater division of labour.

Thus,

industrialisation was self-reinforcing (Grübler 1994: 41).

Smith’s analysis of an emerging industrialism, as far as it went, was accurate. In hindsight, it is quite obvious that the invention of several iron- and coal-based technologies around 1750, especially the steam engine (Graedel, et al. 1995: 17), complemented the repetitive nature of the work under mass-production principles to

9 increasingly decouple human labour from human productivity (Grübler 1994: 41, 46, Grübler 2003: 47).

In other words, the value of goods produced was no longer

dependent solely upon the amount of available human labour. Rather, it became more and more dependent on the amount of fossil-fuel energy that could be extracted from the ground and utilised in the new machines. Increasing this new machine labour was a matter of applying better technology and more fossil-fuel energy to the task (Goklany 2003: 194, Hawken, et al. 1999: 6-7).

The benefits to humanity of this self-perpetuating expansion of human enterprise are astounding. Since around 1750, global industrial output has risen by about a factor of 100 (Grübler 1994: 41).

Accompanying this productivity growth, the human

population, since 1800, has increased from 900 million to over 6 billion due to improvements in human health and welfare, as reflected in such statistics as the increase in life expectancy at birth from less than 30 years to about 66 years worldwide and the decline of infant mortality from about 200 in every 1,000 people to 57 in every 1,000 in 1998. Between 1961 and 1997, daily food supplies per capita increased by 23%, while the real price of food commodities has dropped by 75% since 1950. Worldwide adult illiteracy rates declined from 45.8% in 1970 to 25.6% in 1997. People are also more productive, work fewer hours, and are more likely to live in pluralistic and democratic societies than before the advent of industrialisation. Of course, these global averages mask all the times and places where wars and other natural and man-made disasters have locally decreased human welfare, sometimes dramatically, but this does not contradict the assertion that industrialisation has resulted in overall benefits to humanity (Goklany 2003: 195-98). The irrefutable fact is that people living in industrialised societies enjoy a higher standard of living than those who do not (Graedel, et al. 1995: 21-22).

2.1.2. Profit, or liquidating capital

In addition to the measurable effects that industrialisation has had on humanity, it also brought with it a certain cultural change in the way in which humanity understands its

10 relationship with the world (Fischer-Kowalski 2003: 36). In essence, industrialisation automatically assumes the continuing and unlimited expansion of the scope and the scale of human endeavour in order to break through all limitations to human progress (Bourg 2003: 58, Andrews, et al. 1994: 469).

Profit and economic viability are

inextricably linked to growth and increasing production (Robinson and Mendis 2006: 251). Early in the industrialisation process, such assumptions were not unreasonable as humanity had not yet acquired the ability to affect change on a truly global level; there was, indeed, plenty of room to grow, and growth did, indeed, improve the welfare of humanity. Until humanity met some sort of global limitation to growth, growth would remain both feasible and desirable, and any consideration of limiting growth by any one individual or organisation, in this context, would only mean losing competitive advantage and the risk of being overtaken and eliminated by competitors (Graedel, et al. 1995: 66).

This kind of confidence and optimism in the capabilities of humanity came as industrialisation altered humanity’s relationship with the natural world. As an example of this change, medieval maps of the known world would depict various dragons and monsters in the unknown places beyond human knowledge. Nature was seen as an untamed wilderness that needed to be “conquered” (Cantor and Rayner 1994: 69-70). Before the industrial decoupling of human productivity from human labour, this conquering was slow and expensive work, and while explorers were unlikely to be eaten specifically by dragons, venturing into uncharted lands and waters was nevertheless extremely difficult and often fatal. Industrialisation changed this. The new industrial “spirit” (Corbusier 1946: 12), fuelled by new scientific understanding leading to new tools producing greater affluence that, in turn, enabled further scientific understanding, conquered the wilderness and banished the metaphoric dragons forever.

As the wilderness was conquered, the spoils of the victory, in the form of harvested and extracted resources, were transformed into machines and products that would benefit humanity. Progress equated to the substitution of nature with artefacts; artefacts served humanity, while wilderness was the chaos, the malign other (Bourg 2003: 59). Industrialism has been so successful that, since the mid-eighteenth century, more of nature has been destroyed than in all prior history. Every aspect of wilderness has been

11 aggressively and successfully exploited and transformed, including the planet’s fresh water, minerals, oil, trees, fish, soil, air, grasslands, savannas, wetlands, estuaries, oceans, coral reefs, riparian corridors, tundra, rainforests, and more (Hawken, et al. 1999: 2). In fact, industrialism has been so successful that humanity has all but run out of wilderness to conquer. It is at this point that the problem with industrialism becomes unavoidably apparent.

On the 7th of December, 1972, the crew of Apollo 17, on their way to the moon, took the first completely day-lit full Earth photo that has come to be widely known as “The Blue Marble” (Jones 1995, Williams 2006). This photo, showing our planet floating in the black void of space, represented a growing popular awareness that the Earth was a finite thing, and that beyond the Earth there was, in all practicality, nothing but void. Humanity had pretty much conquered everything that was within reach. The Earth could no longer be understood as the malign other, or the enemy. Rather, must be seen as the fragile vessel on which we depend for our survival (Cantor and Rayner 1994: 69), but which we had been aggressively and indiscriminately plundering for over two centuries.

Along with the popular imagery came also the dawning scientific understanding that a substantial amount of “wilderness” is, in fact, necessary for human survival. Since the proposal of the Gaia hypothesis (Lovelock 1987), we have come to better understand the interconnectedness and interdependency of all life on Earth, of which humanity is an inalienable part. We may keep building more fishing boats, but we are running out of fish to catch. We may dig more wells and build more water pumps, but the aquifers are becoming depleted and there is scarce little water left to pump out. As we harvest the forest of its timber, we sacrifice the forest’s ecosystem functions: water storage; flood and erosion management; wildlife habitat; oxygen production; maintaining the fertility of the soil; and other irreplaceable services.

Many of the services that healthy

ecosystems provide to humanity cannot be substituted through technological means, and must therefore be considered priceless (Hawken, et al. 1999: 3-4, Côté and Wallner 2006: 114).

12 This new definition of our relationship with nature has led to the idea of “natural capital.” Un-harvested and unexploited nature constitutes a productive form of wealth, in the same way that industrial machines and tools are a form of wealth (Hawken, et al. 1999: 3-4). The liquidation of natural capital in order to build up manufactured capital is not profit at all, but only the redistribution of resources. Even more worrying is the fact that this redistribution is never perfect; the conversion of harvested resources into manufactured goods consumes energy and generates wastes, and so it is questionable whether we have made any net profit in reality (Stahel 2003: 264).

Also of concern is industrialism’s fundamental tendency to replace human labour with machine labour. Economics and pragmatics dictate that, for tasks where machines are more productive than humans, machines should be employed so the humans can be redeployed more productively to work that cannot be mechanised. However, the reality is that the redeployment of human capital faces many geographical, cultural, and knowledge barriers, and people who have difficulty relocating or retraining may simply be left behind.

Human capital also provides social services that maintain social

cohesion and civilisation, beyond the usual productive and economic activity. Without viable employment, this social capital tends to degenerate and civil society, the very condition that makes industrialisation possible in the first place, may degenerate or even collapse (Low 2001: 206-07).

We are coming to the limits of the industrialisation paradigm, and we can no longer blindly follow the assumptions that have brought us to where we are today. The costs of “progress” need to be addressed, and a viable strategy to proceed from here must be found.

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2.2. Resource depletion While the human population continues to increase and people expect continuing improvements in their standard of living, humanity already appropriates over 50 percent of the carrying capacity of the Earth’s terrestrial and aquatic systems for our own use (Dale 2006: 3-4). The industrial system, by its very nature, is resource depleting (Bringezu 2003: 20), and the economic logic that led us to this situation is becoming quite obviously untenable in a finite world (Hawken, et al. 1999: 7-8).

2.2.1. The one way street of consumption

From an anthropocentric point of view, resources may be divided into three categories. Firstly, there are non-renewable/depletable/exhaustible resources, which are resources with a natural rate of replenishment that is so low as to be negligible for practical purposes. Examples include metals, minerals, and fossil fuels, which have natural rates of renewal on a time scale of millions of years or more. Secondly, there are renewable resources, which have mechanisms for naturally replenishing themselves at a rate significant for human purposes. Examples include fresh water, with many aquifers recharging on an annual cycle, and trees, which grow continuously and can mature into useful timber in as little as 20 years. Finally, there are recyclable resources, which are resources currently in non-dissipative use and which may eventually be recovered and reprocessed into subsequent uses. These include both non-renewables, such as iron and plastics, and renewable, such as paper and timber (Hodge 2006: 152).

Also, different materials and elements are found on Earth in varying degrees of abundance, and in forms that have different energy and technology requirements for the extraction and processing into usable materials. Theoretically, then, resource depletion should be easily managed simply by choosing to use abundant and recyclable materials while avoiding rare and non-recyclable ones. For example, the elements aluminium, bromine, carbon, iron, hydrogen, manganese, nitrogen, oxygen, sulphur, silicon, and titanium are relatively abundant on Earth and/or have good potential for recycling, as

14 well as posing minimal disruptive toxicity problems for humans and for the environment. On the other hand, the elements silver, arsenic, gold, cadmium, chlorine, chromium, mercury, nickel, lead, and petroleum compounds are relatively rare and/or difficult to recycle, or they pose significant toxicity problems (Graedel, et al. 1995: 239).

Unfortunately, the situation in reality is more complex than this. The industrialist mentality and its accompanying industrial system enables and encourages a mass consumption society premised upon depleting and overwhelming the earth’s resources. The economic system, which supposedly provides the impetus and the rationale for industrial activity and systematically managing its limits, is so heavily distorted by such things as stockpiling, cartelisation and macroeconomic trends that there remains no robust relationship between the abundance of various materials and their market prices (Graedel, et al. 1995: 233). While an increasing popular awareness of the limitations of resources and of humanity’s negative impacts on the environment have already caused industrial and regulatory systems to modify and adapt themselves to increase resource productivity and reduce environmental damage resulting from mismanaged wastes, the overall volume of industrial production continues to increase, along with the overall amount of materials and energy consumed by the global industrial system (Andrews, et al. 1994: 469). An increasingly sophisticated application of a flawed paradigm will not solve the problem.

How problematic is the paradigm? For example: the production of a semiconductor microchip produces 100,000 times its own weight in waste materials; the production of a laptop computer produces 4,000 times its own weight in wastes; the production of one litre of Florida orange juice consumes two litres of gasoline and 1,000 litres of water, and; the production of one tonne of paper requires the input of 98 tonnes of various resources. In the United States of America, the most industrialised nation in the world and the model for continued economic development across the globe, industry mobilises about 1,800 metric tonnes of materials in order to provide for an average middle class family for a year. In total, it is estimated that the U.S. industrial system mobilises some 113 billion metric tonnes of materials per year. Of this volume, 90 percent is discarded

15 without being utilised in any way (Graedel, et al. 1995: 19, Bringezu 2003: 21), and less than 2 percent is actively recycled (Hawken, et al. 1999: 50-53).

About four- fifths of the total mobilised volume is wastewater (Hawken, et al. 1999: 5253), which sometimes goes though some post-processing to reduce its environmental impact before being discarded into waterways and the ocean. At this point, the water re-enters the natural hydrological cycle, which is effectively an automatic solar-powered water recycling system. Another substantial category of mobilised material is mining overburden, or the rock and soil that are dug up in opencast mining in order to get to the mineral ores buried in the ground, and tailings, the material left over after extracting the useful minerals from the ores. After the ore extraction is complete, it is sometimes required to replace the overburden and tailings into the pit, and to restore the landscape to a satisfactory condition (Graedel, et al. 1995: 233-34). In both cases, the impacts of the scale of resource mobilisation can be reduced somewhat.

However, such remediation strategies, and others like them, do not address the fundamental industrial assumption of one-way, resource-to-waste flow of materials and energy. Only one percent of the total volume of materials mobilised in the United Stated remains in use within products six months after their sale (Dale 2006: 4). This means that materials, a substantial amount of which is not or cannot be naturally or industrially recycled, are being “used up,” transformed from an utilisable state into an unutilised one. This material is usually placed into landfills that are designed to be permanent repositories, the contents of which are assumed to be without value whatsoever (Graedel, et al. 1995: 28-29, 233).

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2.3. Environmental Degradation Alongside the concern about the volume of materials mobilised by industrialism is the concern about how this mobilisation affects the environment. The question is whether the industrial metabolism overloads the environment with wastes and emissions in types or in volumes that the environment cannot effectively accommodate (Bringezu 2003: 20). Recent awareness of environmental damage have motivated the application of various “end-of-pipe” technologies that separate the most damaging chemicals from waste streams that are released into the environment. However, much like the issue of resource depletion, such mitigating measures do not address the fundamental problems of industrialisation by eliminating the production of such undesirable wastes in the first place, but simply move it from a more immediately harmful medium to a less immediately harmful medium. Continuing increases in overall industrial activity means that environmental degradation cannot be entirely halted by such measures (Bringezu 2003: 21, Gibson and Peck 2006: 137, Yap 2006: 97, Graedel, et al. 1995: 47, Andrews 1994: 405, Andrews, et al. 1994: 469).

2.3.1. The forecast: Global ecological collapse

Although industrialisation has allowed humanity to overcome some physical and ecological limitations to enable a general improvement in quality of life (Hawken, et al. 1999: 65-66, Andrews, et al. 1994: 469), humanity is unable, and may never be able, to exist independently from the ecological functions performed by life on this planet (Lovelock 1987: 6-10).

Furthermore, industrialism itself, in seeking to substitute

natural capital with artefacts, has inflicted a substantial amount of damage to the planet’s ecological systems. In effect, the industrial system is a mechanism that releases millions of tonnes of toxic materials into the environment every year (Grübler 2003: 4647), wastes almost all of the resources it appropriates, buries otherwise reutilisable resources in such a way as to make them too expensive to retrieve, and measures its success by how quickly it uses up the resources on which it relies (Graedel, et al. 1995:

17 20-21).

While this was probably not what humanity aimed to accomplish when

industrialism began, it is undoubtedly what has resulted (Côté and Wallner 2006: 11415).

The disruptions to natural systems span a wide range of temporal and spatial scales. Global scale concerns include global climate change triggered by changes in the composition of the atmosphere, ozone depletion following the release of chlorofluorocarbons (CFCs) into the atmosphere, the destruction of natural habitats and the erosion of species diversity as a result of nature being “crowded out” by expanding industrial activity (Schlesinger 1994: 245-46), and disruptions to the planets “grand nutrient cycles” of carbon, nitrogen, sulphur, and phosphorous (Ayres, et al. 1994: 12153). At the regional level, concerns include the degradation of surface waters by poor agricultural and industrial practices, soil degradation resulting in reduced soil productivity, the increased acidity of precipitation primary caused by the release of nitrogen and sulphur into the atmosphere by industrial activity, and the disruptions to ecosystems resulting from the poorly managed use of herbicides and pesticides. At a local level, concerns are primarily about toxic pollution in the environment, including smog, groundwater and soil pollution, oil spills, and the disposal of captured toxic wastes (Graedel, et al. 1995: 33-47, Goklany 2003: 204). At all scales, human industrial activity disrupts the environment in a manner that is ultimately detrimental to the continued viability of the human industrial system.

Compounding the problem is the fact that the relationships between environmental causes and effects are typically complex and unpredictable at the outset. For example, since long before the onset of industrialisation the combustion of biomass has occurred in the clearing of land for agricultural purposes and for use as a fuel source. In terms of global climate disruptions, this released carbon dioxide, a major greenhouse gas, into the atmosphere, along with numerous other atmospheric pollutants. The clearing of land for agriculture also resulted in habitat loss and, in severe cases, reductions in biodiversity. Subsequently, agricultural practices would result in soil erosion and the reduction of soil productivity as the vegetation that maintained the health of the soil had been removed. While all of these issues had been present throughout human history, industrialisation resulted in a dramatic increase in the human population, which

18 demanded that more land be cleared for agriculture to support the growing population. As a result, a traditionally manageable problem is magnified to a scale that is unmanageable using the old techniques. The problem is only further exacerbated by the adoption of fossil fuels as an energy source and chemical fertilisers to artificially and temporarily improve soil fertility (Graedel, et al. 1995: 25-28, Andrews, et al. 1994: 469-70). Obviously, the early humans who discovered agriculture and fire did not anticipate all these consequences, nor is it desirable for us, now, to stop conducting agriculture or using fire. Yet, problems exist that must be dealt with.

Perhaps the most worrying revelation is that all this environmental damage does not significantly correlate with the benefits gained from increasing industrialisation. When the direct material input (DMI) into an economy, or the total mass of materials extracted and used for further processing, is compared with the gross domestic product (GDP) per capita of that economy, is has been found that high GDP per capita (associated with a high standard of living) (Moomaw and Tullis 1994: 158-59) can result from low DMI (associated with low environmental damage), while a high DMI may still produce low GDP per capita (Bringezu 2003: 26-30).

The relationship between economic

performance and carbon dioxide emissions (often used as a proxy for industrial activity, reflecting our reliance on fossil fuel use) is similarly uncorrelated, with some economies capable of continuing to grow while reducing carbon dioxide emissions, while some others increasing emissions without a corresponding improvement in economic performance (Moomaw and Tullis 1994: 168-71). While both environmental damage and improved standards of living are the results of industrialism, it cannot be said that the presence of one necessarily means implies the presence of the other.

It is estimated that humanity has already appropriated and degraded between one third to one half of the planet’s land area, including half the world’s original forests and more than half of the accessible surface fresh water (Goklany 2003: 204, Dale 2006: 3-4), and if humanity continues to function under the one-way, resource-to-waste mentality, then the degradation will only continue. Up to 40 percent of the planet’s plant productivity has been appropriated by humanity for our own use, and an increasing population working with the existing utilisation patterns will ultimately require all of it (Schlesinger 1994: 246). Extrapolating this status quo into the future, the result will be

19 global ecological collapse. Therefore, the conclusion is inescapable: the status quo is not viable, and we must learn to do things differently.

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2.4. The technology paradox Throughout the preceding discussion of industrialism, it can be seen that the state of humanity is inextricably intertwined with the development and use of technology (Graedel, et al. 1995: 2-3). In the beginning it was technological innovations that enabled the industrial revolution. Subsequent technological advances brought with them all the benefits of industrialism, as well as all the costs and all the environmental damage.

At this point, it is the further development and careful application of

appropriate technologies that will give humanity the knowledge and the resources to successfully manage the challenges of resource depletion and environmental degradation (Robinson and Mendis 2006: 252, Goklany 2003: 204-05, Grübler 2003: 47, Grübler 1994: 55-56).

When considering the possibilities for humanity’s relationship with technology, three general categories of options are apparent: to treat technology with suspicion and emphasise low-technology options in all instances; to treat technology with respect and strive to evolve technology in directions that does not deplete resources or degrade the environment, or; to carry on business as usual and trust that technology will continue to benefit humanity overall as it has done in the past (Graedel, et al. 1995: 67-69). The low technology option is widely considered to be unacceptable, as it would mean giving up most of the quality of life improvements brought by industrialisation, including modern medicine, safe drinking water, sanitation (Graedel, et al. 1995: 21-22), agriculture, and modern transportation.

The most likely consequence of the low

technology option would be a catastrophic reduction in the human population as the technologies that enable humanity to support its current population are abandoned. The business-as-usual option, in light of the preceding discussion of the industrial status quo, is equally unrealistic (Graedel, et al. 1995: 67-68)

It was stated earlier that humanity has become increasingly aware of the limitations of industrialism, and has even begun to respond and adapt to them, although the inherent assumptions underlying industrialism prevent the industrial system from halting the depletion and degradation altogether. In truth, any system so large as to span the globe

21 and include the entire human race will suffer from a very high degree of inertia, and will require much time and effort to change (Grübler 2003: 47). Perhaps paradoxically, success under the industrial paradigm requires a culture that, to some extent, supports and encourages technological change, so that the society will be able to capture the benefits of new technology (Goklany 2003: 203-04).

The current challenge to

industrialism will be whether it can change some of its own underlying assumptions in order to retain its benefits while reducing its costs. Again, it is paradoxical that this should become a problem, since the very basis of industrialism is the reduction of costs, albeit it was originally concerned with labour costs, while the current problem comes from environmental costs.

There are already certain trends in technology that show promise for addressing environmental costs. The first is the tendency towards dematerialisation, or the ability to provide the same or better quantity or quality of service by utilising fewer material inputs. The most dramatic example is the exponential increase in the computational power of personal computers, even as the computers themselves become smaller. Along with dematerialisation is the reduction of environmental damage resulting from energy usage for the same or better service rendered, or de-carbonisation. Thirdly, advances in information and computer technology is allowing much more precise control of industrial processes even as it reduces the effort required to control them (Graedel, et al. 1995: 21-24, Grübler 1994: 56, 64). These trends are reflected in statistics like reductions in overall air and water pollution, reductions in the rate of habitat to cropland conversion, and slowing in the rate of increase of carbon production in advanced economies (Goklany 2003: 204-05). In these instances, environmental and economic concerns converge, but the environmental benefits are still outstripped by the continued expansion of industrial activity.

The apparent answer, then, is to actively encourage the widespread diffusion and adoption of those dematerialising and de-carbonising technologies that reduce environmental costs, especially in developing economies where the heavily polluting and resource depleting development path towards industrialisation can, to some extent, be avoided by choosing more appropriate technologies that were previously unavailable or unviable (Graedel, et al. 1995: 30-31). Furthermore, future industrial developments

22 by the more advanced economies must evolve technologies that place much more emphasis on environmental costs, to consider them as much as they do labour and resource costs. If the same industrialist motivations that so effectively overcame the limits in human labour that existed at the beginning of industrialisation can now be brought to bear upon the environmental limitations that we face today, then we may be able to devise a new techno-societal paradigm that does not require the depletion of resources and the degradation of the environment (Graedel, et al. 1995: 31, 69, Grübler 1994: 64-65).

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3. The responses: Paradigm shifting

This chapter provides an overview of some of the ideas that have developed in response to the growing awareness of resource and environmental limitations. Four fields of study are outlined here: environmental economics, which addresses the mismatch between the increasingly recognised practical value of the environment, and the lack of its representation in the economic and accounting mechanisms of industrialism; industrial ecology, which proposes to redesign the industrial system to utilise cyclic material flows, as opposed to the current wasteful one-way paradigm; sustainable urbanism, which deals with redesigning human settlements and built infrastructure to enable resource efficiency, eliminating inherently wasteful settlement patterns, and; lean organisation management, which builds on the principles of effective decentralisation, active process control, and continuous improvement from the manufacturing realm, along with their efficiency and flexibility benefits, and applies them more broadly to other facets of human activity. All four fields represent new thinking that seeks to resolve the shortcomings of the conventional industrial system.

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3.1. Environmental economics Environmental economics deals with the role that the current economic system has to play in resource depletion and environmental degradation.

Economics is the

codification and quantification of human needs and wants, and the actions we take to meet them. The primary shortcoming of economics, in relation to the environment, is the inability of the system to capture all the costs and benefits of all human activity. The effort to identify these “externalities,” and subsequently to modify the economic system so that they will be internalised, is known as environmental economics.

3.1.1. Externalities and imperfect knowledge

An externality is an item of concern to a particular system that is not explicitly measured or addressed by the system in question. The most relevant manifestation of externalities to environmental economics is the way in which neither environmental damage nor environmental benefits that accrue to the society at large are effectively captured in the prices of commodities. Therefore, environmental impacts generally do not substantially affect the decision-making processes of corporations and other entities (Graedel, et al. 1995: 86, Gibson and Peck 2006: 143). It is only possible to make an individual or organisation “pay” for the damage it inflicts on the environment if a society’s laws stipulate that individuals or organisations are financially liable for any environmental damage they inflict. But even then, it is only if and when that individual or organisation’s actions are brought to account that its finances become affected. By then, irreversible damage may have been done, or the laws may not require a full compensation that completely reverses the damage done, or the individual or organisation may not be capable of paying the full compensation anyway. The net effect is that the damage done by one person or party is inflicted on and “paid for” by the whole of society in the form of a reduction in the value of natural capital. This will occur as long as individuals are not offered any immediate and obvious incentives to protect the environment at the time when decisions are made.

25 The relevance of environmental externalities was first brought to public attention in an article by Garrett Hardin, in 1968, in which he described the “tragedy of the commons,” or the natural tendency for commonly owned resources in a free society to be mismanaged. He described, as an example, a community pasture area on which a number of herdsmen would graze their animals. In the absence of any system to control each herdsman’s activities, they would each independently decide to increase the size of their herd in order to take the most advantage of the pasture. The outcome is that the pasture would become overgrazed, the health and productivity of the pasture would collapse, and there would eventually be no pasture left (Hardin, cited in Graedel, et al. 1995: 1). The relatively small amount of damage done to the pasture independently by each herdsman is an externality that does not significantly affect each herdsman until the point at which the pasture is destroyed by the cumulative effects of their activities, but by that time it is too late to address the issue.

When dealing with local commons, such as the pasture, it may be possible that the herdsmen would learn their lesson and find another pasture on which they would conduct a better-managed system of grazing their animals, and thus evolve into a sustainable society, albeit having destroyed a few pastures in their history. Unfortunately, the earth’s atmosphere and hydrosphere represent global commons, of which we currently have no substitutes (Graedel, et al. 1995: 2). Somehow, humanity has to learn the lesson before the mistake is made.

It has been pointed out that the failure of economics stems from the fact that it does not treat production and consumption in a manner that is compatible with the fundamental laws of physics. Externalities to the system will inevitably exist unless all inputs into the production process are converted into usable outputs without any leftovers of any sort, or all final outputs are entirely consumed without any residuals of any sort, or all environmental concerns are privately owned and the rights to them are traded in competitive markets (Ayres and Kneese, cited in Fischer-Kowalski 2003: 44-45). The first two situations are physically impossible with any currently available means. The last would be an enormous undertaking with uncertain consequences. The scale of existing externalities is immense, spanning all natural resources, ecological systems, and human social and cultural systems. These resources are essential inputs into the

26 industrial system that cannot be replaced at any price and, if destroyed, will make industrialism impossible. Yet, industry has always used these resources as though they were free and unlimited (Hawken, et al. 1999: 5-6).

Current benchmarks for

environmental responsibility, such as the ISO 14001, begin to integrate these externalities into business decision-making mechanisms, but they still fall far short of capturing even most of the effects (Bourg and Erkman 2003: 13).

This shortcoming of conventional economics is part of the flawed assumption of perfect knowledge in economics: that buyers and sellers in the market inherently know the values of the various costs and benefits of the items they are trading, and therefore are able to make the best use of the resources they have available to them by rationally comparing the options (Hawken, et al. 1999: 5-6). The problem is that the effects of environmental damage are, as a rule, unpredictable and non-linear, and therefore it becomes impossible to know the true costs until a substantial length of time after they have been incurred. The practical values of resources also change over time, as new technologies add to the possibilities for their application. The market may find it affordable to use up a particular resource today, only to have technology find a more valuable use for it tomorrow, by which point it is depleted and expensive, or used up altogether (Graedel, et al. 1995: 85). The tragedy of industrialism is the assumption of knowledge in a reality of not knowing: not knowing the costs of environmental degradation when the damage is being inflicted, and not knowing the value of resources as they are consumed and depleted.

Conventional economic indicators, such as the dollar value of gross domestic product (GDP), are particularly responsible for hiding and obfuscating externalities. The reason is that the GDP measures the amount of money spent, not the value of the services received. As such, waste is counted as increases in GDP. For example the petrol used by a vehicle while sitting in a traffic jam is paid for with dollars, and therefore this nonvalue-creating activity contributes to “expanding the economy,” at least according to the numbers. Mistakes are also counted as increases in GDP. For example the dollars spent cleaning up toxic contamination and oil spills, likewise, expands the economy on paper. In a world where economic success is measured by such things as GDP, “success” can

27 easily mean being extremely wasteful and inefficient, spending a lot of money but not actually getting much value out of the activity (Hawken, et al. 1999: 57-60).

3.1.2. Full cost accounting (but how full?)

If the problem with the current economic system is the existence of externalities, then the solution would conceivably be to adopt an accounting methodology that effectively internalises them, so that market prices would reflect, as much as possible, the true costs or commodities and products.

The basic premise of life-cycle assessment (LCA)

methodologies is to evaluate all the economic, technological and environmental implications of a material, process or product across its entire life cycle, from raw material extraction, through manufacturing and consumer use, to final disposal or recovery and reuse (Graedel, et al. 1995: 108, Bringezu 2003: 22, Gibson and Peck 2006: 135-36). Life-cycle management requires companies to consider more carefully how its activities, and the activities of its upstream suppliers and downstream customers, impact the larger environment and society.

However, comprehensive LCAs have proven to be difficult exercises in practice. A comprehensive life-cycle inventory requires collecting and analysing a substantial amount of quantitative data, which often proves prohibitively expensive in terms of the time and the technology required. A further limitation is that LCA methodologies are typically developed for particular products and for specific purposes, and are not widely applicable for other product types or uses. For example, a LCA developed to assess disposable plastic cups would be insufficient to deal with complex items such as cars or computers, and a LCA developed for an internal policy and review within a company may not be rigorous enough to support legal or advertising claims.

Comparisons

between an old product and a new product, or between an old facility and a new facility, may be skewed by the presence of new features or new technologies that substitute one impact for another, “solving” and old problem by creating a new one. Finally, LCAs often require value judgements in balancing the desirability of one impact against another, which inevitably prove to be contentious (Graedel, et al. 1995: 108-09, 276-

28 77).

Companies and organisations with limited resources necessarily make

simplifications and assumptions when conducting LCAs and, in doing so, introduce externalities back into the system.

At best, LCAs factor in these simplifications and assumptions, taking into account the risks of miscalculations, although the concept of risk itself is not without complications. Human perceptions of risks seldom correspond to their statistical reality. For example, standards for environmental cleanups are often based on a one in a million fatality per lifetime risk, whereas the probabilities of dying from driving, cycling, or even just walking on the street are all substantially higher than this. Risks that are perceived to be beyond an individual’s control, such as environmental problems, provoke greater fear and concern, while immediate risks are generally given priority over future risks, even if the scale of the future risk is the same or greater (Graedel, et al. 1995: 50-51). Given such human distortions of risk perception, it may be difficult to convince the public to accept the outcomes of an LCA that weighs risks objectively, if an entirely objective LCA is possible in the first place.

While comprehensive LCAs are impractical for individual companies, it may make sense for related industries to deploy system-wide LCA frameworks. The full product life-cycle may involve the activities of numerous individual participants, including the resource extractor/recycler, the fabricator, the assembler, the retailer, the consumer, and the waste disposer/recycler.

It is redundant for each of these participants to

independently conduct comprehensive LCAs spanning the entire life-cycle, and thereby duplicating each other’s work. Approaching the LCA as a collective responsibility would result in a more cost effective and more comprehensive analysis, as the particular experience, expertise and resources of each participant can be utilised. However, it would also require the development of close and mutually beneficial relationships between the participants, and require a substantial amount of trust in sharing what may potentially be corporate secrets. While the potential benefits of such system-wide integration of industrial systems are great, the technical and organisational complications are also substantial, and the risks are largely unknown (Gibson and Peck 2006: 139-40). The LCA system itself would need to be both simple to use and robust, allowing meaningful and consistent comparisons among different products, while

29 capturing externalities to the fullest extent possible (Graedel, et al. 1995: 277). Ideally, it would become as simple to use as the way the dollar is currently used for representing the costs-excluding-externalities value of commodities. As the perfect outcome, the LCA would be integrated into the dollar, such that the dollar itself becomes an all-costsinternalised value system. While such an overhaul of the entire economic system is unlikely to happen soon, LCAs should be designed and conducted with this goal in mind.

3.1.3. Incentives and disincentives

The dollar was, implicitly, always intended to be an all-costs-internalised value system. The industrial system did not originally set out to deplete resources and degrade the environment; it simply neglected to factor these into the equation, and then subsequently developed itself in such a way that it became dependent on these externalities. Value systems, in principle, reflect the needs and wants of a society, and form the basis for incentive/disincentive structures direct human activity (Graedel, et al. 1995: 63-64). The currently flawed value system of the dollar naturally creates a flawed incentive structure that is equally distorted by externalities. The externalities argument is the primary rationale for governments and regulators to actively provide incentives for environmentally benign behaviour.

The argument for the preservation of an

undistorted “free market” to exist in its current state is made redundant when the market is fundamentally distorted by externalities (Gibson and Peck 2006: 142).

When individuals and organisations make decisions, they are essentially performing a cost/benefit analysis (CBA), balancing incentives (benefits) and disincentives (costs) in order to determine the optimal course of action. However, CBA decisions, especially the myriad decisions made by individuals in their day-to-day activities, are often rushed and spontaneous, vulnerable to assumptions, lack of information, and lack of time. Economic costs and benefits, as defined by conventional economics, are generally captured in prices and accounting practices, although different aspects of costs and benefits may be aggregated, such that the details of particular activities, materials, or

30 processes are hidden and therefore unmanageable. Social and environmental costs and benefits are generally economic externalities, and the life-cycle analysis required to identify them are costly and fraught with difficulties (Graedel, et al. 1995: 86-87).

While prices do not capture the full costs of materials and activities, there are other factors that can motivate companies to consider the social and environmental implications of their actions. These include clients and customers who increasingly demand “cleaner” products and services, governments who impose increasingly stringent environmental regulations, employees who prefer to work for environmentally and socially conscientious companies, banks who have more favourable lending policies towards companies with lower risks of environmental and social litigation, insurance companies that are more amenable to covering companies with lower environmental risks, and various taxes, charges, tradable permits, and other government-imposed economic instruments designed to encourage environmentally benign behaviour (Graedel, et al. 1995: 293, Gibson and Peck 2006: 141, Côté and Wallner 2006: 129, Yap 2006: 106-07, Andrews 1994: 412-15). These other factors represent additional costs and benefits imposed from outside the market that, to the extent that they are effective, internalise various externalities into the market.

While there are a variety of individuals and entities that attempt to influence corporate behaviour, the effectiveness of these influences generally depend on how much and how visibly they impact the “bottom line” of a company’s finances. For example, shifting customer preferences are usually swiftly and effectively factored into corporate activities, as it clearly and directly affects a company’s profitability. Government regulations, while often unwelcome, are also internalised quickly if there are high penalties for non-compliance.

Advice and complaints from various scientific

organisations and environmental interest groups tend to be ignored unless and until they come to have a substantial influence on customer behaviour, in which case the company is really acting on changing customer preferences. With this in mind, it would appear that the most effective means to affect corporate behaviour is to change end-consumer preferences, and then allow these preferences cascade up the supply chain, as downstream companies demand higher environmental standards from their suppliers so

31 that they can meet the demands of their own customers (Graedel, et al. 1995: 294-95, Gibson and Peck 2006: 141, Andrews 1994: 413-15).

Even if there are sufficient motivations for companies to conduct their activities in an environmentally benign manner, it still does not necessarily mean that it will happen. Conflicting incentives and disincentives exist in all circumstances and at all scales of activities, and companies will have to deal with the internal incentive structure that motivates its employees, primarily through salaries and bonuses.

Adopting more

environmentally benign approaches often mean changing corporate inertia in processes, in structures, and in cultures, which carry with them costs in management time and effort and also the risk of failure. Even if a change will benefit a company as a whole, it may not be acted upon if individual managers are not motivated to act, and the results do not benefit them in a way that compensates them for their risk-taking (Panayotou and Zinnes 1994: 389-91, Yap 2006: 105-07). Similar problems of diverging incentives also plague the interface between the company and the customer. When a customer pays a one-off price for the purchase of a product or service, it gives little incentive for the producer to consider the full life-cycle operating costs of the product or work produced. In order to give the producer the right incentives, the pricing structure would need to incorporate the long-term running costs, ideally in a scheme where the producer directly pays for part or the whole of the environmental operating costs, and therefore is directly rewarded for making environmentally benign products (Hawken, et al. 1999: 90-93).

In order to be the most effective, incentive mechanisms at all levels need to be aligned and mutually reinforcing.

Governments need to maintain a minimum level of

prescriptive regulations that provide basic protection to people and to the environment, but should increasingly adopt flexible incentives that reward innovation beyond the baseline in order to encourage continued improvements (Stahel 2003: 271, Andrews 1994: 406-10, Graedel, et al. 1995: 80-81). Existing subsidies and incentives that encourage wasteful and destructive behaviour need to be identified and eliminated, as do existing disincentives for more environmentally benign activity (Graedel, et al. 1995: 82, Griefahn 1994: 424-25, Hawken, et al. 1999: 41-42, 159-67).

Access to

environmental information needs to be made freely and widely available to the public so

32 that they can make informed choices as customers. Where environmental concerns align with more traditional economic motivations, such as reducing material input requirements, reducing waste volume and therefore disposal costs, reducing potential environmental liability, and improving competitiveness and corporate image, these need to be emphasised and reinforced (Gibson and Peck 2006: 142-44). Companies must come to see the whole of society, not just individuals who buy their products, as their “customers,” as there are substantial exchanges of costs and benefits between all parties, in the form of information, technology, expertise, regulations, shared use of common resources, and more. A more holistic and inclusive view of the role of the corporation within society will allow better understanding and management of these exchanges (Graedel, et al. 1995: 66-67, 81-83).

3.1.4. Products and Services

Ultimately, the aim of substantially reducing material throughput in the industrial system through economic means might be best achieved by removing the incentive for throughput altogether by shifting the focus of the market from the products produced towards the services rendered. For many of the products produced, people do not actually need the products for the products themselves, but rather for the services they provide (Kazazian 2003: 85).

The unsustainably high throughput of materials in

contemporary industrialism is the result of the consumerist assumption that more products equates to more services; more products cost more to produce, but also provide more benefits, therefore the focus is placed on producing more and more products in order to maximise profit, which is the positive net difference between costs and benefits. However, conceptually decoupling products produced from services rendered would result in the situation where products represent material and waste disposal costs, but only services represent benefits, and therefore the motivation would be to provide maximum long-term service by utilising the minimum of products produced (Kazazian 2003: 85-86, Hawken, et al. 1999: 10-11, Graedel, et al. 1995: 305, Stahel 2003: 266).

33 The shift from products to services is achieved by redefining what is being bought and sold, and it provides benefits to both the provider and the user of the service (no longer conceived as the producer and the consumer of a product). Efforts to increase resource productivity will translate to a long-term competitive advantage to the provider, especially as resources become increasingly scarce.

The service approach

fundamentally focuses on the quality of the service provided to the customer, and thus both customer satisfaction and customer loyalty would be increased. The addition of continuing, long-term customer satisfaction considerations to the economic transaction guarantees the user a high level of service, but requires the provider to effectively manage the risks involved with changing technologies, economic conditions, and user demands, risks that would otherwise be passed to the user along with product ownership. These will have to be addressed through appropriate design strategies, such as modular design for flexibility, interoperability and upgradeability, designing for reuse, remanufacturing and recycling, and designing for durability (Stahel 2003: 272). The customer is freed from the burdens of ownership, and has more flexibility in changing or choosing the terms and conditions of their services to most effectively meet their changing needs (Stahel 2003: 274-75).

In certain situations, the “zero option,” simply not doing something, may be the most effective. This is the especially the case with luxury services that serve little practical value. For example, a hotel may offer to replace towels once every several days instead of every single day and, in doing so, reduce the economic and environmental costs of cleaning and sanitizing the towels, while the guests can be given a discount and be content in knowing that they have chosen the environmentally benign option. In other cases, the shared utilisation of equipment would allow more people to draw the same services from a smaller number of more intensively utilised products. This would require a fair and trusted management entity that can effectively manage the pool of resources. If the services provided by the shared resources ever becomes unsatisfactory or unreliable, individuals would be motivated to revert back towards individual consumption (Stahel 2003: 272-73). The utilisation of state-of-the-art information and communication technologies, particularly internet based systems, will greatly facilitate the effective management and distribution of such shared services (Hawken, et al. 1999: 44).

34 In all cases, the key is to reward the provision of suitable services, not material products for their own sake. Without this distinction, there is no incentive for producers to leave the consumerist paradigm of mass-production, which currently rewards products over services. The perverse situation is that producers are motivated to make products with the largest acceptable amount of superfluous material and features with the shortest acceptable usable life, so that consumers will have to buy more expensive products more often, with the ultimate outcome of unsustainably high material throughput. This divergence of interests between producer profit and consumer utility exists even with traditional product lease arrangements, as the motivation of the lessor is to give the customer the highest quantity of products for the highest price, and to encourage continued lease renewal. When the commodity being traded is services, not products, the motivations of the provider and the user converge towards cost minimisation, changing the outcome into one that aims towards zero material throughput and providing continuous high-quality service from highly efficient and reliable products (Stahel 2003: 273-74, Hawken, et al. 1999: 134-36).

The shift away from personal ownership and consumption also has the effect of consolidating responsibility and authority for the management of products into entities that are able to deal with them more effectively. Professional resource managers with more consolidated assets will have the resources to respond to changing technology, regulations or environmental conditions in a coordinated manner that may not be possible with fragmented individual, ubiquitous ownership (Graedel, et al. 1995: 30304). Instead of producing goods that companies hope their customers will want or, worse still, are compelled to buy because there are no superior alternatives, the successful company in the service economy paradigm will focus on providing the kind of services that will enhance their customers’ competitive advantage, which will translate into sustainable, mutually beneficial provider-user relationships (Fawcett and Cooper 2000: 36-43).

35

3.2. Industrial ecology Industrial ecology approaches the problems of resource depletion and environmental degradation from the perspective of industrial processes and design. Material flows in natural ecosystems are overwhelmingly cyclic, with very little material entering the system from sources outside of the overall system and also very little material sequestered out of the system compared with the volume of material circulating within the system. In contrast, human industrialism is a one-way, resource-to-waste paradigm. The focus of industrial ecology is in finding ways to emulate the cyclic model, reconsidering industrial and consumer residues as misplaced and misallocated resources that should be re-cycled into the system.

3.2.1. The (idealised) ecological metaphor

In the concept of industrial ecology, industrial refers to the entirety of human industrial activity, while ecology refers to the science of ecosystems. Through this definition, industrial ecology is concerned with both the long-term evolution of the human industrial system and with the metabolic activities of industries at a smaller scale (Bringezu 2003: 20, Hawken, et al. 1999: 10). The ultimate goal of industrial ecology is to direct the evolution of the human industrial system into a mode of operation that is compatible with the biosphere and that is sustainable over the long term (Erkman 2003: 338-39, Andrews, et al. 1994: 471).

When considering ecosystem-scale metabolic systems, both biological and industrial, it is possible to identify three basic types of metabolic activity, with corresponding paradigms for material flows (Graedel, et al. 1995: 93-94, Côté and Wallner 2006: 130, Graedel 1994: 23-26, Bringezu 2003: 22). The first, most primitive, “Type I” system has a low level of metabolic activity in an environment of abundant resources, a situation that may be postulated to have existed very early in the development of life on earth, and most certainly the situation faced by human industry at the beginning of the industrial revolution. The small amount of metabolic activity has negligible impact on

36 the surrounding environment, and therefore the metabolism is linear, only concerned with and limited by its ability to harvest and consume resources. As the size and the scale of the activities of the metabolism grow, it inevitably encounters environmental constraints in the form of limited input resources and output sinks. In this “Type II” system, growth of the metabolism is constrained and further development is only possible through increasing efficiency of resource use and effectively finding ways to neutralise the increasing amount of “wastes” being generated.

The third type of

metabolism is when development reaches a stage where the flow of materials is practically completely cyclic and internalised. The combined bio-, atmo-, hydro- and lithospheres of the planet may be considered a single “Type III” metabolic system, utilising solar energy to drive a materially closed system. A Type III metabolism is likely to have highly complex material exchange relationships between myriad processes and sub-systems, working across a large range of spatial and temporal scales. Obviously this complicates efforts to analyse and understand such a system.

The increasing environmental limitations faced by human industry will force it to transition from a Type I to a Type II, and eventually to a Type III system (Côté and Wallner 2006: 115-30, Andrews, et al. 1994: 471). There simply are not enough resources on the planet to sustain human industrialism as a linear, Type I metabolism (Dale 2006: 3). Industrial ecology, in its attempt to enable this transition to proceed as smoothly and effectively as possible (Bourg and Erkman 2003: 14), emphasises both the reduction of undesirable by-products and the re-categorisation of any inevitable residues from particular processes as products that are to be utilised in other industrial processes wherever possible (Gibson and Peck 2006: 134, Erkman 2003: 340). In the perfectly designed process, every unit of energy input must be used to produce a desired material transformation, every molecule that enters the process must exit it as part of a sellable product, and every product should be utilised in another similarly well designed process (Graedel, et al. 1995: 94-96, Bourg 2003: 59-61).

While this ideal may seem

impossible to achieve, it is nevertheless the direction in which the human industrial system needs to evolve symbiotically with the planet’s natural systems (Kazazian 2003: 85).

37 Fundamental to achieving this goal is for humanity to learn to see its activities not only in terms of how they directly benefit or harm humanity, but also in terms of how they affect the planet as a whole (which ultimately bring indirect benefit or harm to humanity). From this less anthropocentric perspective, human activity can be described as an endeavour to separate various minerals that would otherwise remain locked in their ores, to put them through various physical and chemical transformations, and then to disperse them into various soils and waterways a few years or decades later; it involves drilling through the earth into porous rocks filled with oil or natural gas, extracting their contents, combusting them, and releasing the reaction products into the atmosphere; it involves the synthesis of chemical substances that have never before existed on this planet, some of which are specifically designed to kill plants and animals, while many of the others only do so inadvertently. In summary, humanity continuously transforms materials in an irreversible manner, on a planet where it is evident that the scope for such transformations are limited (Socolow 1994: 3). Natural ecosystems also transform materials, but they have evolved into systems that do this in a largely cyclic manner, extending the viability of their activities to a timescale of tens of millions of years or more. Human systems need to do the same.

Industrial ecology encompasses two major areas of change: changing human behaviour and changing technology.

On the one hand is the argument that current human

behaviour is premised on continuing the expanding resource consumption of industrialism, and therefore a sustainable cyclicity cannot be reached without first achieving substantial cultural changes away from the consumerist mindset, which in turn will demand changes in technology. The other side of the argument is somewhat more pragmatic, if also more conservative, in focusing on developing enabling technologies that, in a way, aim to “upgrade” current systems into a form where cyclicity is both technically possible and financially profitable, expecting that the behavioural changes will naturally follow (Gibson and Peck 2006: 134-37). Among the subtle but important nuances are such distinctions as efficiency versus conservation: the former suggests doing more with less, while the latter suggests making do with less. Furthermore, most literature on industrial ecology does not directly challenge the “sovereignty” of the market and its incentives for mass consumption.

This is an

understandable approach since such a challenge would be vigorously resisted by the established economic system, and the conflict could well be counterproductive. The

38 ecological basis of the industrial economic paradigm is also questionable in the sense that it is based on a somewhat idealised interpretation of nature. Ecological systems are not entirely closed, nor are they entirely stable; issues such as complexity, ambiguity, disturbances, non-linear relationships, critical thresholds, and even mass-extinction events are part and parcel of natural ecological systems. How these will translate to human industrial ecological systems, and whether or how much they can or should be managed is impossible to know at this early stage (Robinson and Mendis 2006: 248-53, Hodge 2006: 159, Lister 2006: 18-19, Bourg 2003: 59, Erkman 2003: 341). Despite these difficulties, industrial ecology remains a paradigm that promises to serve humanity better in the long term than the existing consumerist paradigm (Andrews, et al. 1994: 471).

3.2.2. No wastes, only misallocated resources

One of the central tenets of industrial ecology is its rejection of the very idea of waste. Conventionally, waste is defined as useless or worthless material. Such a definition is obviously anthropocentric as it judges the value of materials from a human perspective. From a more objective point of view, all materials have impacts on the environment, especially if these materials are the products of industrial processes. Environmental impacts, in turn, mean impacts to humanity (Graedel, et al. 1995: 10). Simply to judge certain materials as valueless, and therefore discount them from consideration, does not make the materials or their impacts disappear; instead, it turns them into dangerous externalities.

Industrial ecology, therefore, does not allow these materials to be

discounted, but insists that they are a resource for which a productive use has not yet been found.

There are two general approaches to addressing these misallocated resources. The first approach deals with the system on a local scale in terms of internal efficiency, and addresses those materials that were intended to be converted into a useful product, but, for one reason or another, ended up exiting the system as an unutilised residue. This encompasses many related concerns, such as waste minimisation, pollution prevention,

39 source reduction, low and non-waste technologies, cleaner production and ecoefficiency.

Essentially, they all deal with the problem of designing systems that

generate minimal residues in the first place. Efforts in this direction are generally technology-driven, leading to reductions in the material intensity of goods and products, reductions in their energy intensity, reduction in the utilisation, generation and dispersion of toxic materials, improving material recyclability, promoting the sustainable management of renewable resources, improving product durability, and increasing the service intensity of goods and services (Yap 2006: 97-99, Erkman 2003: 340).

Many of these efforts are concerned with more efficient product design and manufacturing, which are internally controlled by the producer and therefore part-andparcel of existing management systems and structures. Notable exceptions are efforts to improve product durability and service intensity, representing the consumer phase of the product life-cycle, and to improve material recyclability, representing the postconsumer phase of the product life-cycle. A useful example of these concerns would be to consider the provision of drinking cups. A ceramic cup may be costly to manufacture and long-lasting, while disposable plastic cups may be much less expensive to manufacture but only last half a dozen uses at most before it is disposed of. Supplying a population with ceramic cups would mean that, once enough cups were produced to supply the entire population with a few each, the production of new cups can be limited to replacing the few that are accidentally broken or lost, while supplying a population with plastic cups would require a high level of continuing production to replace the large number of cups that are spent daily. The use of ceramic cups thus represents the durable alternative (Hawken, et al. 1999: 74). However, the manufacturing of ceramic cups constitutes the irreversible transformation of clay into ceramics, thus the broken cups are not recyclable (although they may be down-cycled into lower-value uses). The plastic cups, on the other hand, are made of a material that can be recycled with minimal degradation of material, and thus the population can theoretically be endlessly supplied with cups while utilising a finite amount of material. In this situation, the energy, material and environmental costs of extracting and disposing of the materials for the clay cups, as well as their usage costs in terms of cleaning and washing for reuse, need to be balanced against the costs of collecting, recycling and redistribution of the plastic cups. Which of the options is less wasteful is difficult to determine, and any decision

40 will have to factor in usage patterns as well the relative costs and impacts of energy, materials, and processes.

For products more complex than simple cups, the issue of durability will overlap with a concern for maintenance and upgrade costs.

Ideally, complex products should be

designed with modular components where each module can be quickly replaced or upgraded with minimal disruption to the product’s performance, and the modules themselves should be designed for remanufacturing or recycling.

In this way, a

product’s breakdown or obsolescence would not necessitate the replacement of the entire product. In effect, material throughput and end waste generation are both reduced through product life-extension services. This encourages an extended maintenance relationship between the producer and the user, which will promote better stewardship of the product and its consequences throughout the product’s life-cycle (Graedel, et al. 1995: 251-57, Yap 2006: 98-99, Kazazian 2003: 85).

The second approach to misallocated resources deals the relationship between systems, and with effectively utilising the inevitable by-products created by particular processes in other, complementary processes. The redeployment of wastes from one process as resources in another process is by no means a new idea. It has been noted that the North American lifestyle some seventy years ago (notably, before the Second World War) was characterised by very modest levels of material throughput. Items such as clothing and packaging were repaired and reused many times over, and informal systems existed for the collection and redistribution of discarded items. Families who owned sufficient land would grow vegetable gardens, served by compost heaps on larger properties and in rural areas (Yap 2006: 98). In the industrial realm, cement makers have long utilised waste from other industries in the production of their products, such as slag from steel manufacture, fly ash from coal burning, silica from silicon manufacture, and sometimes concrete rubble from demolished buildings, while using other wastes such as old tyres, oils, solvents, and meat and bone meal as combustion materials (Bourg and Erkman 2003: 18). In these instances, economic opportunities have fortuitously converged with environmental concerns.

41 Notwithstanding the fact that industrial development since the Second World War has made the consume-and-dispose pattern of resource consumption more “affordable” under conventional economic logic, displacing much of the ad-hoc end-user driven recycling initiatives described above, these examples still only represent the most primitive examples of industrial ecology. A more advanced form would be the design and deployment of a systemised cluster of mutually supporting enterprises, cycling materials within the cluster such that undesirable outputs from the system are practically eliminated (Gibson and Peck 2006: 135-36, Grant 2006: 55-58). An example of such an industrial symbiosis is located in Kalundborg, Denmark, and while the material flows are not entirely closed, it certainly diverts much of the residues towards productive reutilisation (Ehrenfeld and Gertler 1997). However, this is still somewhat short of ideal, as the system lacks flexibility and resiliency. A breakdown or a change of circumstances in one enterprise would force a difficult adjustment in the rest of the system, and perhaps break the system altogether.

This can be overcome by the

evolution of wider material exchange networks and marketplaces, where residues are flexibly and competitively traded in much the same way conventional commodities and products are done today. As long as the complexity resulting from the increasing scale of industrial ecological systems are effectively managed, increasing the scope and comprehensiveness of this marketplace will improve redundancy and resiliency in the system (Bourg and Erkman 2003: 18).

Complicating the issue is the fact that the sources and types of currently mismanaged residues are myriad and varied. Production residues may be solid, liquid, or gaseous, and the transformation of visible solid residues into invisible gaseous residues that more easily escape notice is not an acceptable waste minimisation strategy. Residues may be inherent to the manufacturing process as inevitable by-products or may be material that is inefficiently processed, and it is therefore a matter of process redesign to either eliminate them or to effectively minimise and capture them for redistribution.

A

substantial class of residues is packaging material, which should either be eliminated through product design or made durable and reusable. In all cases, production residue streams need to be identified, measured, minimised, and finally captured for reutilisation. In addition to the production residues are the consumption residues, in the form of materials processed by the product during use as well as the product itself at the end of its useful life. Some products are intentionally dissipative, such as paints,

42 detergents and fertiliser, and some products become unintentionally dissipative, as the results of leaks and breakages. Consumption residues tend to be much more distributed and difficult to manage and, where they cannot be eliminated through redesign, should be effectively collected for reprocessing and redistribution, or made biodegradable and be released into the environment in a manner that can be sustainably processed by surrounding ecosystems (Graedel, et al. 1995: 204-25, 43-44, 51-56).

3.2.3. How to sell rubbish

It is not that rubbish has absolutely no value, but that the potential utility of the material is not great enough to justify the costs involved in processing it to extract the utility. Obviously, then, the key to effectively reutilising residue materials is in successfully maintaining or improving the utility of these materials, while reducing the costs involved in its recovery and reuse. From the perspective of maintaining utility, a useful approach would be to re-categorise residues as secondary products, and apply the same quality control and management techniques to them as a company would apply to what it considers as its primary products, the products that it sells to its conventional customers (Graedel, et al. 1995: 183-86).

A major obstacle to the successful

redistribution of residues is the practice of mingling waste streams. Under the use-anddispose paradigm, the “wastes” are usually carelessly dumped together in a pile, and the difficulty in separating them out into discreet materials again renders the whole pile economically unviable and consequently “worthless.” This purity problem is overcome simply by redesigning processes so that waste streams are kept separate, preventing high-value residues from being contaminated by low-value ones, and preventing environmentally benign residues from being made hazardous by mixing with toxic residues.

In terms of the primary products, efforts should be made to ensure that all materials retain as much of their embedded utility as possible. Embedded utility is the value manufactured into a product, such as the higher value of refined metals over their base ores, or the higher value of an automobile over the sum of its raw materials (Graedel, et

43 al. 1995: 113). Embedded utility can be retained by avoiding the use of a multitude of different materials in a single product, avoiding the use of toxic materials, and assembling products in a way that facilitates easy disassembly.

When a complex

product arrives at a remanufacturing/recycling facility, the materials that make up the product need to be separated for reutilisation. The task would be greatly complicated by the presence of a multitude of different materials that cannot be simultaneously accommodated by the recycling process. Likewise, the presence of toxic materials greatly increases the complexity and costs of the task, while having different materials tightly glued together or otherwise inseparably bonded may make recycling impossible altogether (Graedel, et al. 1995: 263-66). Efforts to eliminate these problems are known as “Design For Environment” (DFE), and may be deployed as a module of a set of existing methodologies known as “Design For X” (DFX), where “X” includes such things as ease of manufacturing, assembly, regulation compliance, reliability, safety and liability protection, and other such design requirements (Graedel, et al. 1995: 186).

Beyond the design and process issues, there are also external factors that limit or facilitate the selling of “rubbish.” First, there is the problem of organisation, in the lack of existing management systems for dealing with the trade of such materials (Yap 2006: 101).

Extending supplier and customer contacts to include residues and recycled

materials would be beyond the experience of many existing companies, and there will be costs and risks involved. Expertise will have to be developed in verifying the quality and suitability of these materials, as well as in assessing the environmental impacts of their use. Relationships with employees, regulators, investors, insurers, competitors, and the community will be redefined as the definitions of “supplier” and “customer” are renegotiated (Gibson and Peck 2006: 139-40). From the government side, exiting regulations regarding waste disposal may place additional costs on recycling and redistribution efforts, possibly eliminating the possibility entirely. Most jurisdictions, for safety purposes, place restrictions on the options available for the disposal of “wastes,” and the definition of the word “waste” becomes a key factor in determining whether this aspect of industrial ecology is viable. If waste is defined as residue material exiting a process that is not directly used in another process on the same site, then the possibility for reutilisation of the material in another process off-site is complicated. If waste is defined as residue material that is not used in another process within the corporation, then the possibility for trading of residues between companies is

44 complicated. Alternatively, if waste is defined as materials that are to be released into the environment, then existing regulations can continue to ensure that the environment is not harmed by emissions, while allowing much more flexibility in the reutilisation of residue materials in different processes (Graedel, et al. 1995: 83, Yap 2006: 101).

3.2.4. A marketplace of residues

The ultimate goal of industrial ecology is to change the destination of as many residues as possible from “disposal” to “market,” which is to say the residues would be retained and reused within the industrial system as substitutes for raw material inputs, instead of being sequestered or, worse, detrimentally inflicted upon the environment. In its most developed form, residues should be able to be traded as commodities in markets, in much the same way that commodities such as grains, crude oil, or gold are currently traded. Traditionally, industry has been exceptionally proficient at resource extraction and manufacturing, while being remarkably deficient at managing wastes and other externalities. By redefining residues as products instead of wastes, the intention is to transform a core weakness of industry into a core strength. It has been suggested that the procurement of products should be made into a two-way process, where obsolete or worn products are sold in a “waste supermarket” back to the manufacturers or other entities specialising in the recovery of post-consumer resources. Coupled with much more stringent restrictions on what can and cannot be released into the environment, the issues of recycling and waste management becomes internalised into the industrial system (Braungart 1994: 335-36).

However, that is the ideal outcome, and there is a substantial distance between that destination and where we currently stand. Where pilot projects have been conducted in attempts to establish a residues trading mechanism in an existing industrial environment, substantial barriers were found in the lack of knowledgeable, qualified and experienced individuals to manage the residues, in the low volume of waste produced by individual companies and the low value of that waste compared to the costs of managing it, and difficulty in identifying potential customers and solutions.

45 Overcoming these barriers would be a substantial undertaking even for a large company with the necessary resources at its disposal; for small and medium enterprises working individually, they are insurmountable. In order to acquire the necessary economies of scale to make proper residues management viable, companies generally need to pool their resources and collectively implement the initiatives. Thus, the challenge is to integrate and cooperate horizontally, between different producers of similar residues, as well as vertically, between the producer of residues and those who can make use of them. There is a need for environmental and residues specialists as well as effective organisers and facilitators who work between and across existing companies, and who are able to form the necessary networks to enable cross-industry residues reutilisation (Vallès 2003: 90-94). These efforts are helped by tools that gather the information on the residues generated in a particular area into databases and maps, which enable network efficiencies whereby each additional participant to the database multiplies the possibilities for residues exchanges and thus multiplies the value of the system as whole. Beyond the immediate residue concerns, such a database also becomes a tool for business communication, networking and planning (Kincaid 2003: 97-99).

Beyond the organisational difficulties there are also infrastructural and technological concerns. Having identified the optimum possible reutilisation of residues, difficulties in storage and transportation may still render the exchange economically unviable or environmentally detrimental. For example, while recycling plastics is theoretically preferable to incinerating it to recover a part of its embodied energy, having to transport light plastic materials across vast distances to a centralised recycling facility may be more detrimental to the environment, and also cost more, than incineration in localised facilities (Graedel, et al. 1995: 247-48, 73). The ideal solution in this case would be to relocate the sites of plastic residue generation to a closer proximity to the recycling facility, or to devise and adopt smaller-scale, distributed recycling technologies that can be deployed closer to the sites of residue generation, but both these options require a substantial amount time and resources to deploy. In the meantime, incineration may pragmatically be the best option, although it is a resource depleting and environmentally damaging one. In the case of glass, where even incineration is not an option, it may be necessary to stockpile the material in facilities not unlike conventional rubbish dumps, though the material in such a facility would be better organised and kept separate from

46 other materials, with the intention of future re-extraction and reutilisation (Graedel, et al. 1995: 233).

On one hand, industrial ecology represents a major reversal in the way we conceive of material flows and in the way we define resources and wastes. The idea that industrial activity can continue, and possibly even intensify, while largely eliminating the input of virgin materials and the output of waste materials that are incompatible with natural systems, seems too fantastic when one considers the current state of affairs. On the other hand, the methodologies and mechanisms required for the transformation are in themselves fundamental aspects of the existing system, and only require some adjustment and adaptation to fit the task. The human industrial system can source materials from across the globe, transport them to any factory anywhere in the world, use them to produce items as simple as T-shirts or soft drinks or as complex as automobiles and computers, and then transport those products to consumers anywhere in the world. The issue of post-consumer materials management is not any greater in scope or any more challenging technologically than what is done already. Commodities of all kinds are traded in marketplaces large and small across the globe, effectively coordinating the movement and utilisation of materials and components between individuals and entities numbering the billions. The same system can be extended to facilitate the effective redeployment of process and product residues. The technical challenges of industrial ecology are surmountable; all that is needed to begin with is a conceptual paradigm-shift: there are no wastes, there are only misplaced resources.

47

3.3. Sustainable urbanism Modern cities are both the products and the mechanisms of industrialism (Luka 2006: 71): skyscrapers and factories are built from the materials of modern industry, by the machines of modern industry, for the purpose of housing the various production lines and service companies that enable modern industry; ribbons of highways and railways, massive air- and seaports are made possible by modern transportation technologies, and themselves are making possible the rapid global and local movement of people and commodities; sprawling residential suburbs are enabled by the automobile and house the exponentially growing human population, which is, in turn, the primary driving force behind the exponentially growing production and consumption of the human industrial system. Like all other aspects of industrialism, modern cities are premised upon the unviable paradigm of infinite growth.

Cities need to change from an

infrastructure that promotes increasing consumption into an infrastructure that promotes conservation, enables resource efficiency, and embody environmentally benign settlement patterns, while ensuring continued human wellbeing. This change is the focus of what can be called sustainable urbanism.

3.3.1. Sprawl: what we want versus what we can afford

The urban condition that is the most closely associated with excessive resource consumption is sprawl. Sprawl is generally defined as low density, one- or two-storey urban development of single-family residential dwellings, accompanied by commercial and industrial areas of a similar height and density. This development occurs in a noncontiguous manner, with different land uses physically separated from each other. Street patterns are likewise non-contiguous, often convoluted and ending in cul-de-sacs. Part and parcel of this low density, segregated development pattern is the usage of private automobiles as the primary, often only, means of transportation (Burchell, et al. 1998: 6-7). Sprawl is most prevalent in the United States, although it exists, in various forms, anywhere in the world where a combination of increasing affluence and growing

48 automobile ownership has enabled it to happen (Luka 2006: 88). Sprawl has become the preferred pattern of development under these circumstances because it allows the convenience of the unlimited use of the automobile, dilutes congestion, physically separates new developments from any fiscal and social problems that may exist in older parts of the city, creates conditions that cause property values to appreciate over time, and generally requires lower property taxes than properties in more central locations. A remarkable aspect of sprawl development is that it is almost always “successful,” at least at the local scale, taking advantage of locations with an abundance of relatively inexpensive undeveloped land (Burchell, et al. 1998: 1-3). It is this “success” that allows it to persist and even expand in scope decades after it was first identified as a negative phenomenon.

The motivations for contemporary sprawling behaviour can be traced back to the cities of the early industrial revolution in the late-nineteenth century. The factories of the time polluted the air and the water, while overcrowded conditions created unsanitary and unhealthy conditions within the city (Real Estate Research Corporation., et al. 1974: 6). The solution of the time was to separate the factories from residences, creating suburbs that were physically distanced from the pollution, and linked to places of employment via train, tram, and later automobiles. In the 1970s, increasing popular environmental awareness prompted governments in developed countries to enact environmental regulations that greatly reduced the negative impacts of industry, to the extent that co-location by many low-impact industries with residences can often take place without adverse consequences (Grant 2006: 55-63).

However, the planning

regulations continue to mandate, and the public continue to prefer, substantial separation and distances between different land uses.

Modern housing can also

accommodate high density living (characterised by a high number of dwellings per unit of land area) without resulting in unsanitary and oppressive overcrowding (characterised by small dwelling sizes and/or a high number of occupants per dwelling), yet lowdensity detached housing is still widely considered to be better and more desirable (Real Estate Research Corporation., et al. 1974: 7).

Sprawl has become the generally

accepted way of doing things, even as the conditions that originally necessitated it have changed substantially (Grant 2006: 50-53).

49 It has also been suggested that sprawl is something of a cultural phenomenon inextricably bound to the American psyche, linked to the “frontier” of early American history. Throughout its history, development patterns in the United States has been characterised by the concept of an unlimited supply of land, the right of land ownership open to everyone as encouraged and protected by the U.S. constitution, the unquestioned assumption that land should be developed and be supplied with the necessary infrastructure to do so, and a belief that any development that conforms to whatever set of codified legal procedures is in force should be allowed to do so as of right.

Such a culture does not question the suitability and desirability of a new

development, as the only force that can limit market-driven development in this culture are sets of static, generalised, and possibly obsolete planning regulations. Any attempt to change this system would meet stiff opposition from those who would insist that the free-market mechanisms currently at work must not be tampered with (Burchell, et al. 1998: 5-6). Ironically, the free-market argument is an invalid one: In the post-war period, the U.S. federal government provided both direct subsidies, in the form of federally insured low-cost mortgages, and indirect subsidies, in the form of the federally funded interstate system, that encouraged sprawl. Indeed, both of these were necessary to enable the widespread emergence of what we consider to be modern, automobilebased sprawl. It was also at this time that the word “sprawl” itself entered planning literature to described this new form of growth (Burchell, et al. 1998: 9-10).

Despite the overwhelming desire of the American public to sprawl into the suburbs, central city urban areas continue to provide the bulk of the employment in any metropolitan region, with almost all of the high-paying jobs located in central city areas. Central urban areas provide major medical care and tertiary education that cannot be found in the suburbs. Low-wage workers who cannot afford to move into the suburbs continue to live in low-income housing situated in the central city, while being employed in, and necessary for, the functioning of the suburbs. The identity and appeal of metropolitan areas tend to be defined more by the conditions of their central cores than by their suburbs. The strength of cities, in the form of agglomeration economies that concentrate large amounts of labour, capital and infrastructure, continue to allow central cities to support the kind of financial and service industries that are necessary to serve suburban markets, as well as compete in global markets. Suburbs can hardly exist without a central urban core to support them, and yet the outward movement has been

50 inexorable, even at the risk of diluting the agglomeration economies of metropolitan regions (Burchell, et al. 1998: 25-26).

The most immediate problem of sprawl (though far from the only problem) is that, at the regional or metropolitan level, sprawl is expensive. On the one hand, existing city infrastructure at the centres are being partially abandoned, though still requiring full upkeep costs, while on the other hand new infrastructure is being constructed to serve the new sprawling developments. The costs of providing public services to a sprawling development are also increased due to the greater distances and transport costs in lowdensity urban patterns (Real Estate Research Corporation., et al. 1974: 5-6). The result is that local governments often cannot afford to maintain or provide any infrastructure except for that which is growth related, and even then they can only afford to do so because they place a levy on new development specifically for the purpose of providing infrastructure to them (Burchell, et al. 1998: 28, Hawken, et al. 1999: 46). In addition, sprawl, by definition, consumes vast tracts of land. As sprawl spreads, the prime agricultural lands, forests, fragile lands and natural habitats around cities are lost, converted into low-density houses, “big-box” mega-retailers, sprawling warehouses, light-manufacturing facilities and roads. Like other resources under the industrialistconsumerist model, land is depleted and used up. Obviously, the abandonment of older urban areas and movement outwards towards new developments cannot continue indefinitely; eventually sprawl will consume all available land, even if the loss of agriculture and natural habitats were not a more pressing limiting factor (Burchell, et al. 1998: 3-4).

3.3.2. Consumerist urbanism versus sustainable urbanism

Essentially, sprawl is a consumerist approach to urbanism. In the same way that industrialist manufacturing processes consume virgin raw materials and discard residues as waste, sprawl consumes forests, natural habitats and productive agricultural lands in the production of new suburban developments, while discarding old urban cores as waste.

This is encouraged by the fact that agricultural land at the fringes of

51 metropolitan areas are much cheaper to acquire than land in the urban core (Burchell, et al. 1998: 4-7), although this “affordability” is in reality the result of environmental externalities undervaluing undeveloped land and distorting the market.

For those who

can afford to keep moving outwards, sprawling is indeed good: new housing; new infrastructure; new shops and entertainment facilities, and; increasing property values as the surrounding area becomes more developed and populated. When the property values reach a high enough level, the people sell their properties, pocket the difference as profit, and continue moving outward to repeat the cycle. The decaying urban fabric that gets left to those who cannot afford to keep moving outwards is an externality, at least until the costs of its upkeep are eventually transferred to the whole of the city in the form of property taxes, although even this is not a possibility in those metropolitan regions where civic governance is divided, and where the governments of growing parts of the city are unwilling to share revenue with the governments of the parts that are decaying (Burchell, et al. 1998: 7, Grant 2006: 56, Orfield 1999: 65-69). By allowing some people to leave the problems of the city behind for others to deal with, sprawl potentially encourages and perpetuates the “throw-away” mentality that is so characteristic of consumerism, and a lack of long-term commitment to a place that will undermine the formation of meaningful communities (Burchell, et al. 1998: 88).

Addressing the problems created by sprawl requires an integrated approach that takes into account both the growing and the declining areas of the city, or, in other words, the entire urban “life-cycle.”

Unfortunately, many urban areas are managed under

increasingly obsolete zoning and subdivision codes that are designed for individual cities and towns, and not for integrating sprawling metropolitan regions. As those planning principles are scaled up, zones become vast, dysfunctional tracts of single-use, similarly sized lots where distances between residences, workplaces and amenities create social isolation and make pedestrian commuting impossible (Barnett 1999: 7374). The metropolis also creates the possibility for region-wide infrastructure and services, like airports, highway networks, major retail and office clusters, and cultural institutions, that must be managed at the regional scale (Calthorpe 1999: 15-16). In a metropolis where citizens have the automobile-assisted ability to live and work wherever they wish, the old assumptions of static neighbourhoods are untenable as individual families and businesses are continually motivated to go somewhere “better.” However, the new developments on the urban fringe are far from perfect themselves,

52 being newly constructed with underdeveloped infrastructure, lacking the history and coherence of the older city and lacking also any of the “rural charm” that has been paved over with roads and built over with new low-density housing developments. Given dissatisfaction with the new developments, on the one hand, and sprawlaggravated social and maintenance problems in the inner city, on the other, the motivation is to move outwards once again (Barnett 1999: 5-6).

The response to the dysfunctions of consumerist urbanism comes in the form of initiatives like New Urbanism and Smart Growth, which, among other things, demand that the problems of the inner-city be addressed through holistic approaches that take into account the interrelated social, economic, and environmental issues that operate at the local, regional, and global levels (Burchell, et al. 1998: 29-38, Grant 2006: 55). It is recognised that some earlier slum clearance and urban renewal initiatives that have focusing primarily on the physical form of the city, with the assumption that rebuilding a society or an economy is as straightforward as rebuilding physical structures, have been often ineffective due to their narrow focus and insensitivity towards complex conditions. Suburban sprawl and urban decline are now recognised as symptoms of a much larger process of economic and technological change. Any proposal to “fix the problem” must take this wider context into account.

In order to overcome the

motivation to sprawl, urban areas, both old and new, need to be designed at a level that is almost unprecedented in the scope of its considerations and the integration of different disciplines. The task of designing urban forms goes beyond the provision of shelter and human comfort, and into design that promotes civil behaviour, enables economic and cultural vitality, nurtures supportive and functioning communities, and incorporates ecological compatibility.

Accomplishing this will require the close

cooperation of all stakeholders: design professionals, government officials, property developers, businesses, employees, residents, and all the other individuals and organisations that have a stake in the city (Barnett 1999: 6-10).

Sustainable urbanism is an approach to designing and maintaining cities that does not require the unlimited consumption of land and other material resources, and does not result in environmental and social degradation. First, it rejects the notion that it is possible or desirable for cities to keep growing outwards indefinitely. Physical limits

53 need to be defined for the metropolis, taking into account such things as geographical boundaries, natural wildlife habitats, existing agricultural uses, transport systems, and the necessity of maintaining sufficient densities for a rich and dynamic city centre (Yaro 1999: 23-25). Within the metropolitan boundary, governance needs to be integrated enough to enable system-wide solutions to be devised and deployed, and to prevent the kind of intra-metropolitan competition for tax base that encourages ill-conceived growth (Orfield 1999: 65-69). Development within the metropolis should be in units of mixeduse neighbourhoods, connected via effective transport corridors and encouraged to develop particular district characters, with the effects of encouraging community formation and reducing the need for automobile travel (Barnett 1999: 73-77, PlaterZyberk 1999: 79-82, Norquist 1999: 97-99). At the scale of individual urban elements and buildings, design should focus on urban social and economic interactions, the integration of urban elements into the urban fabric, reflecting local conditions of history, culture and climate. It should also be guided by a comprehensive but flexible neighbourhood development plan (Lennertz 1999: 109-12, Schimmenti 1999: 169-71, Lister 2006: 15-17, Polyzoides 1999: 127-32, Kelbaugh 1999: 155-59, Solomon 1999: 123-26).

In all aspects, sustainable urbanism demands more and better integrated

planning and design at all levels, rejecting the superficial and unsustainable “successes” of consumerist urbanism (Luka 2006: 70-88).

3.3.3. Time, space, materials and energy

Particular urban configurations and forms have associated “costs,” in terms of the time, space, materials and energy required in the construction and upkeep of the urban fabric and in terms of the costs of using that urban fabric in the day to day activities of its occupants. For example, in comparing the public costs of sprawling urban patterns with more compact and highly planned patterns, it is usually found that examples of sprawl have higher infrastructure costs, represented by the longer roads, sewers, pipes, power lines, and other built infrastructure that are required to service the more sparsely spaced population, and that public operating costs are higher for the same quality of service provided due to the absence of any significant economies of scale (Burchell, et al. 1998:

54 45-60, Hawken, et al. 1999: 108). In terms of transit and transportation, sprawling and segregated urban patterns mean longer distances between destinations that make pedestrian travel unviable and low settlement densities that make public transit also unviable. The result is that, under sprawling settlement patterns, transportation is not generally feasible except by private automobile (Luka 2006: 71, Grimshaw 1999: 3538), a polluting and inefficient mode of transportation in that much of the energy spent is used to move a relatively heavy vehicle, and very little is used to move the relatively light occupants. Under higher density settlement patterns, the short distances between destinations mean that many daily trips can be made on foot, and longer trips can be economically serviced by public transit, both of which are less polluting and less energy intensive (Burchell, et al. 1998: 61-72).

In terms of land use, as already noted above, sprawling settlement patterns, by definition, consume productive agricultural land and natural habitats. Even on the land that is not actually built over, agricultural activity or natural habitats are greatly disrupted by the proximity of urban development, as they both require substantial contiguous tracts of land to be effective (Arendt 1999: 29-30). In sprawling residential development, land is privately owned and divided into parcels, each one typically containing a single-family detached house and some measure of private open space. The provision of this luxury of private open space is one of the primary attractions of sprawling residential development patterns, yet its utility and practical value is questionable: it is massively underutilised; it requires fragmented and inefficient maintenance by amateurs and hobbyists; it has no value at the community or regional level; and it has no real ecological value (Burchell, et al. 1998: 73-81). In all cases, minimally planned, sprawling development patterns consume unnecessarily large amounts of resources and result in an unnecessarily large amount of environmental damage.

The distancing and segregation that is characteristic of sprawl increases the costs of transportation and communication, thereby increasing transaction costs in both resources consumed and pollution generated. These transaction costs hinder the division of labour, which relies on the fluid and convenient transactions between specialised individuals. In response, sustainable urbanism advocates urban design with four key

55 characteristics: mixed-use neighbourhoods; frequent and interconnected streets; mixed building types and ages, and; relatively high densities (Burchell, et al. 1998: 29-38, Morris 1999: 43-45, Hawken, et al. 1999: 45, Grant 2006: 55). The key to successful cities is in cultivating diversity or, in other words, in allowing individuals to specialise and differentiate as per the division of labour, and then in allowing these specialisations to exist in close proximity to each other so that they can efficiently cooperate and trade with one another (Jacobs 1961: 143-51).

Mixing land uses naturally generate diversity and neighbourhood vitality.

A

neighbourhood composed entirely of detached housing is not diverse. There will be few people on the street except in the morning and in the evenings, when residents leave and return home from their occupations. Likewise, a neighbourhood composed entirely of commercial offices will generally only see people on the streets in the mornings and evenings, and perhaps at lunchtime. In these scenarios, different urban functions are substantially distanced from each other, increasing travelling times and transport costs, while conversely decreasing the number of destinations that can be conveniently reached in a given length of time. The streets and public spaces are seldom used, and during the times when they are used, they become congested because everyone is doing the much the same things at much the same time. More subtly, lack of diversity eliminates opportunities that would otherwise exist on diverse streets: secondary uses that serve the primary land uses and provide them with goods and services. In this category of secondary uses are the multitudes of shops, cafes, restaurants, galleries, and other minor enterprises.

Too small to draw many customers by themselves, their

business relies on people moving to and from the surrounding primary uses. If the surrounding primary uses are of the segregated sort, attracting only a limited type of people at limited times, then their business is restricted and, in turn, the services that they can afford to offer to the city are reduced (Jacobs 1961: 152-76, Moule 1999: 10507, Luka 2006: 78-80).

In sprawling development patterns, streets are designed to move as many cars through main roads as efficiently as possible. This is achieved by building large, multi-lane main arterials, served by branching feeder roads and side-streets.

This traffic-

engineering approach to city planning does, indeed, make roads that allow cars to move

56 along them very efficiently. Unfortunately this approach has several fatal flaws: it focuses on “cars” instead of focusing on “transportation,” and it optimises long trips while neglecting the fact that the vast majority of trips in an urban environment are short ones. Minor feeder roads that are designed to connect to major arterials are not necessarily designed to connect with each other, and so destinations that are physically close to each other may be isolated from each other by a convoluted and disjointed street pattern. This kind of distancing stifles diversity and increases transaction costs in the same way as the segregation of land uses. A neighbourhood may have a high enough population to support a diversity of secondary uses, if it were not for the inconvenient roads that direct people away from the neighbourhood instead allowing them to meet and do business (Jacobs 1961: 178-86, Farr 1999: 141-45, Liberman 1999: 101-03, Eulash 1999: 83-86, Arrington 1999: 59-63).

The issue of mixed building types and ages builds on the needs for mixed uses. The buildings’ age and type significantly determine the costs of renting them, and therefore determine the range of purposes for which the buildings can be used. This is significant because, in addition to the diversity in the type of services available in a neighbourhood, diversity in the quality and scope of each category of services is also important. Furthermore, any building that do not age well, or any neighbourhood which would not tolerate old buildings, must necessarily demolish and reconstruct their buildings frequently, at considerable expense in time, materials and energy. Where this expense cannot be afforded, the inhabitants are motivated to leave and go sprawl. Therefore, a critical aspect of a sustainable urbanism is the design and management of buildings so that they continue to function as they age (Jacobs 1961: 187-89).

The final requirement for urban diversity is high density.

The contribution of

population density to diversity in an urban context is easily understood: a city centre with no people in it is a failure, providing no social opportunities, enabling no economic activity, and generating no culture. A city is, by definition, a concentration of people. In this light, low-density sprawl is anti-city and destined to accomplish very little in comparison to dense and vibrant city areas. The attractiveness of sprawl results from a confusion in the distinction between high densities and overcrowding. High density is a large number of people per unit area of ground, while overcrowding is a large number

57 of people per unit of floor area. Relatively low densities can be overcrowded in slums where the infrastructure is insufficient to support the population. On the other hand, remarkably high densities are reached in the some of the large cities of the world where, through proper city planning and building design, conditions are by no means overcrowded.

Obviously, high density, alone, does not create effective cities.

If

neighbourhoods are not mixed-use, higher densities would only aggravate the dysfunctions of homogenisation; without frequent and interconnected streets, higher densities would result in an even more impenetrable and oppressive urban fabric. Perhaps sprawl is an attempt to use low-density development to downplay the problems of poor city design, but a good city is one that is designed to make its concentration of citizens an advantage, not a liability (Jacobs 1961: 201-20, Luka 2006: 76-78).

Sustainable urbanism is about designing cities that can function and prosper without the unviable consumption of time, space, materials and energy demanded by sprawl. This is done by making cities where people are closer together and better connected, and where a more diverse range of activities are possible. Consumerist urbanism exploits externalities for short-term gains while demanding more resources and providing fewer city benefits; sustainable urbanism uses fewer resources to create cities that are actually city-like and invests in long-term wellbeing. While most of the ideas here have been clearly identified some forty years ago, little progress has been made as sprawl continues to be profitable to those who are able to exploit it. One notable exception is the city of Curitiba, Brazil, which, under the leadership of its mayor Jamie Lerner, managed to effectively address its infrastructural, economic, social, and environmental challenges through pragmatic solutions that engaged its citizens to work towards improving their own circumstances (Kroll 1999). However, it is difficult to overstate the importance of Lerner’s leadership to the success of Curitiba, and it is unknown how other cities of the world might emulate this success if they cannot find equally exceptional leaders.

58 3.3.4. Communities and civilisation

Beyond the considerations of economics and resource consumption, cities serve the important role of enabling human communities and human civilisation.

Concerns

include aesthetics, psychological impacts, culture, equality, and social interactions. Often called the “soft issues,” as opposed to the measurable hard data of resource use, these concerns are difficult to quantify, usually highly contentious, and are generally considered to define the success or failure of cities even more so than the hard issues. Like the hard issues, they are significantly affected by urban form, and it is generally found that sprawling settlement patterns are less favourable to successful communities (Bothwell 1999: 79-51).

Among the allegations made about the detrimental effects of sprawl on communities, the most concerning relates to the automobile as an impediment to interpersonal interaction. Transit in sprawling developments is largely by private automobile, a form of transportation that eliminates face-to-face contact between people. Even where travel is by foot, the low densities mean that contacts between pedestrians are rare. Add to this the absence of neighbourhood shops and enterprises due to a single-use mentality in planning practices and the result is that there are almost no opportunities for coincidental public contact with other persons in the sprawling suburban environment. Communities are built upon the mutual goodwill of people in a neighbourhood, and community naturally is weak where coincidental contacts between residents are few and far between (Burchell, et al. 1998: 86-88). At a larger scale, development that comprise overwhelmingly of one type of land-use at one level of density has the effect of creating exclusion and segregation since it, by definition, is attractive and affordable to only one segment of the demographic. Under conditions where almost all new development is sprawling, upper middle-class, single-family detached houses, low-income households can only afford older, less well maintained and more functionally obsolete housing. Poverty, crime, and urban decay become disproportionally aggregated in poor communities that do not have the resources to effectively deal with them. At longer time scales, a culture of social stratification and economic segregation (which often also translates to ethnic and cultural segregation) can lead to systemic discrimination, intolerance, and social unrest (Burchell, et al. 1998: 104-09, Richmond 1999: 53-58).

59 The idea that planning policy would determine the terms of interpersonal relationships and affect the stability of the fabric of society is not an easy conceptual link to make. Yet, when one thinks of a city, one thinks of the city’s streets, that most mundane, public, and everyday part of the urban experience. A beautiful city is one with beautiful streets; a safe city is one with safe streets; a friendly city is one with friendly streets. Far from being mere carriers of pedestrians and automobiles that efficiently funnel people from place to place, the streets are what people know as the city. The activities that take place on the street, and therefore the character of the city, are determined by the people on the street and the people in the buildings that interact with the street. For a street to be safe, lively and successful, it needs to have a substantial number of people on it throughout the day (and into the night), it needs to be watched and overlooked by people in the adjacent buildings such that they take ownership of that public space, and the public space needs to be clearly demarcated from the adjoining private spaces. Such a street becomes safe and successful because it is constantly watched by people who have an interest in preserving orderly behaviour (Jacobs 1961: 29-35, Dover 1999: 14750, Gindroz 1999: 133-37).

Sprawling low-density development adopts a different strategy. By spreading people thinly, activities and interactions, both legitimate and illegitimate, are spread thinly. The result is that the illegitimate activities do not take place with the density or at a scale where it becomes a noticeable problem. But this is not any sort of real solution. As the neighbourhoods age, and the city grows, the uniform affluence and insularity of the once-new sprawling development breaks down, and the neighbourhood finds itself wedged between the city centre and newer suburbs further out. The inability for that type of development to preserve the appearance of order and tranquillity and to handle the volume of strangers passing through it then becomes apparent. Fortunately, some of the qualities that create more materially efficient neighbourhoods noted above are the same qualities that enable effective community street management. Mixed land-uses mean the presence of shops, offices, and other enterprises along with residences, which provides the continuous presence of people who have a stake in the welfare of the neighbourhood. Interconnected streets that are designed for and encourage pedestrians instead of automobiles further add to the direct presence of people and allow for community-building interactions between people. Mixed building types and ages in an area allow different social and cultural groups to come into contact on a regular basis,

60 reducing the misunderstanding and mistrust that comes with insularity and isolation (Weiss 1999: 89-93). Density, obviously, puts people closer together, such that they are able to watch and support each other (Jacobs 1961: 35-50).

In the absence of an effective mechanism for public contact between people, namely a lively and pedestrian-friendly street, the options for interpersonal relationships are greatly reduced.

Neighbourhood parks and squares, in themselves, are not viable

substitutes, as the qualities that make a street successful are the same ones that make parks and squares and other public spaces successful: a variety of people frequenting the space at a variety of times at a sufficient level of density to generate a healthy amount of activity (Jacobs 1961: 89-111, Comitta 1999: 113-19).

When a neighbourhood is

unable to generate these qualities, there exists no safe, neutral space that is naturally fertile with opportunities for casual and spontaneous encounters between acquaintances and strangers. The options that are left to individuals are that they can either choose to not engage with people, engage with people through organised social mechanisms like religious, hobby, or special interest groups, or engage with people within the home on a private and personal level. One limitation of organised social mechanisms is that there is always a degree of self-selection involved, and so individuals will not meet anyone unexpected or with dramatically different interests. The selection limitation is even greater in engaging with people on a close and personal level within the home, as people are naturally cautious in what they share and whom they share it with. Limitations in both cases are further exasperated by low population densities, which create practical obstacles such as transport times and costs. The result of all this is that, in the absence of viable public spaces, people simply do not engage with each other very much at all (Jacobs 1961: 55-72).

Considered in this light, it is clear that city planning and design, either deliberate and considered design or simply the circumstantial result of the absence of design, has a significant impact on the ease or difficulty with which successful and beneficial communities can form and be maintained (Greenberg 1999: 173-75).

Successful

communities are necessary for a neighbourhood to be able to cope with the problems that inevitably arise once the shiny gloss of new development wears off (Jacobs 1961: 112-34). Without successful communities, the easiest way for individuals to deal with

61 these problems is to get up and go sprawl, leaving behind yet another undesirable neighbourhood. It does not make for sustainable urbanism.

62

3.4. Lean organisation management Of the four fields, lean organisation management is the most pragmatic and tangible. Leanness has its roots in manufacturing, growing out of the Toyota Manufacturing System, as a response and a solution to the inflexibility and stifling inertia of large, complex mass-production operations. Technically, tools and processes were redesigned to enable rapid reconfiguration while maintaining high productivity. Organisationally, employees were rearranged into self-managed teams explicitly given the task of managing and improving their own processes and performance. Instead of being locked into existing configurations and technologies as mass production systems were, the new lean paradigm is inherently flexible, upgradeable, and actively rewarded efforts to improve. Improvement meant making products in less time using fewer resources and producing fewer defects; in other words, being more efficient, in the broadest sense of the word (Womack, et al. 1991: 49-68, Swamidass and Darlow 2000: 18-20, Black 2000: 177-78, Feld 2001: 3-6). Here, economic and environmental goals converge: using fewer resources is both economically and environmentally desirable, and producing less waste is both economically and environmentally desirable.

3.4.1. The semi-autonomous cell

In the pursuit of greater flexibility and responsiveness, a primary goal of lean management is to successfully transfer as much of the responsibility for system processes and outputs as possible to those who are in the most direct contact with those processes and outputs. In other words, whoever does the work should be in charge of the work (Feld 2001: 27-28).

This is a response to the situation that exist in

conventional mass-production facilities where a single manager is ostensibly responsible for the products that come out of a manufacturing facility, and everyone who works on the production line ultimately report, through the management hierarchy, to this manager. However, where a mass-production system employs tens of thousands of people and routinely process hundreds of thousands of parts, as they often do in order

63 to produce some of today’s complex consumer goods in sprawling or even multiple facilities, the plant manager is simply incapable of effectively managing the entire system. Any unexpected problem or opportunity that arises in the system cannot be acted upon immediately, because those who are closest to the situation and in the position to act quickly are not authorised to do so. The time it takes to pass information up the chain of authority, the difficulty in conveying the specifics of the situation to a person entirely removed from it, and the time it takes to pass possibly inappropriate instructions back down the chain of authority to where the action takes place all combine to make for a very unresponsive system (McCreery and Bloom 2000: 99). Efforts to “improve” the system by attempting to minimise the possibility for unexpected variations and changes only serve to further lock the system into a fixed and increasingly obsolescent state (Lister 2006: 21).

In the lean organisation, management is massively distributed, in contrast to the centralisation of mass-production. The organisation is divided into modular “work cells,” teams of people who are just large enough to handle their assigned tasks, but small enough to work as a coherent team. Each cell has a leader, and all cell members are given the training and tools to perform the segment of the overall process that is assigned to their particular cell, as well as the skills to manage the cell to ensure things run smoothly (Feld 2001: 29-32). The cells plan their own work schedule, receive orders for work in the form of demand signals from downstream cells, and source their input materials by sending similar demand signals to upstream cells. If any problems arise, the cell itself is the first to troubleshoot the problem, calling on various “service cells” to provide any specialist skills that are beyond the abilities of the cell members (Womack, et al. 1991: 99, Feld 2001: 51). Instead of the mass-production management structure rising upwards, perpendicular to the workflow and overseeing the process from above, the lean management structure is aligned in parallel with the workflow. In effect, each cell is a small business, and what would be a single, sprawling, unmanageable

metabolism

under

mass-production

becomes

a

network

of

interdependent, self-managing businesses in lean production. The responsibility for the final output rests at the end of the work chain, at the interface with the external customer, and the subdivision and delegation of responsibility cascades upstream to the supplier cells, each cell being responsible for their particular assigned parts (McCreery and Bloom 2000: 97-100).

64 A lean organisation necessarily requires a different distribution of skills from that which is required under conventional mass-production arrangements.

Most importantly,

leadership and managerial ability is required much closer to the work being done. Cell leaders need to understand and be able to perform all the technical and manual tasks conducted within the cell, and also to possess all the skills that are necessary to run a successful small business: plan activities; set objectives; measure performance; motivate staff; solve problems; and interface with suppliers and customers. Other cell members are likewise multi-skilled, each able to perform any and all of the tasks required in the cell (Feld 2001: 32, McCreery and Bloom 2000: 100-01). This is a slight reversal from the extreme division of labour that mass-production tends towards. Specialisation and division of labour still applies, but in the form of specialised and highly automated tools and machines; manual dexterity in the performance of simple, repetitive tasks is no longer necessary as these tasks can easily be replaced by machine labour. Human labour is instead spent on the operation and management of these automated machines, making much better use of the human capacity to solve problems, to learn, and to adapt to changing conditions (Womack, et al. 1991: 101-02).

Beyond the human resources aspects, the physical layout and equipment of the work cell are also designed for smooth operations. Cells are designed so that the work progresses in one direction through the cell with minimal material and worker movement.

An emphasis is placed on doing things smoothly and having it done

correctly the first time. Therefore, important goals are to eliminate any build-up of work-in-progress and any need for work to be handled more than once. All necessary tools and materials are placed close to where the work is to take place, and processes are timed to eliminate waiting. Thus, cell design also incorporates such things as staffing plans, cycle times, and routine quality and safety checks. While all of these concerns are also important in mass-production, the difference is that mass-production deploys them through an unresponsive management hampered by technology lock-in, while lean management is flexible and adaptable enough to constantly make adjustments to improve performance (Feld 2001: 73-74, Black 2000: 187).

The implementation of semi-autonomous cells, by itself, does not alter the performance or the efficiency of an organisation. The point is that the increased flexibility and

65 responsiveness allows the development and adoption of further tools and techniques that would not have been viable under the mass-production model, and that the cell members, given greater authority and ownership of their work, are more easily motivated to improve their work.

3.4.2. Metrics

Metrics are about measuring the various activities and performances of an organisation. Timely and relevant measurements can provide an accurate picture of what the organisation is and what it is doing, and enables a standardised form of knowledge that can be effectively understood and communicated.

With good metrics, existing

processes can be compared with past ones, designs for future processes can be simulated to predict their performance, one implementation of any particular process can be compared with another one, anomalies and unexpected situations can be quickly identified and sometimes even predicted, malfunctions can be quickly located, and process improvements can be analysed and duplicated. One cannot effectively utilise or improve something that one does not understand, and good metrics provide that understanding (Feld 2001: 35).

Metrics is a management tool and, in lean organisations where management is distributed and placed close to the work to be done, the metrics are similarly designed and implemented at the cell level, by the cells themselves to measure their own performance.

In order for metrics to have their intended effects of improving

performance and assisting troubleshooting, the people who are being measured have to be doing the measuring themselves.

What this means is that the cell team must

understand and conduct the measurements, and be in control of the factors that are being measured. When the cell is in control of the metrics, there is no longer any temptation to place any blame on “the system,” or any other external factor; the cell owns the system, and if the system is flawed then it is the responsibility of the cell to fix it. This overcomes a major shortcoming of the extreme division of labour in mass-production where many isolated individuals are each responsible for a small fragment of the results,

66 and so when something goes wrong the natural tendency is for each to attribute the blame to others. The fragmentation of mass production does not allow for a clear ownership of metrics, and therefore responsibility. In contrast, localised ownership of metrics is easily and naturally implementable in the work-cell structure of lean production (Feld 2001: 36).

Metrics that measure results are more useful than metrics that measure processes. In conventional mass-production organisations, metrics are often gathered for individual workers or specific machines. Effort is spent in making each component of the system as productive as possible. As per the division-of-labour, accountability is assigned for individual elements and corrective actions are performed on them when things go wrong. The problem with this localised optimisation is that it does not automatically take into account the system as a whole, the importance of the interrelationships between elements, and it does not actually measure what the customer ultimately buys, the final output. To overcome this, lean management places emphasis on two classes of metrics that directly measure results: product quality and product delivery. These metrics view the process from the customer’s point of view, demanding whole-process accountability to ensure that the cell as a whole functions smoothly, not just individual elements. Complementing these results-based metrics are the process-based metrics of cycle time and cumulative roll-through yield. The cycle time measures the time it takes to produce one unit of product or service and directly affects product delivery, while the cumulative yield measures the proportion of work reaching the end of the process that meets quality specifications and directly affects both product quality and delivery (Feld 2001: 38-39). In all cases, the metrics are directly related to the customer and the final end product. This ensures that the focus is placed on the organisation’s core missions, and not on optimising isolated processes that may or may not contribute to a better end result.

As all the cells within an organisation become focused on final products and end results, it becomes a much easier and natural process to align the entire organisation towards specific goals. In specifying a targeted end result, then defining metrics to focus on these results, a large and massively decentralised organisation can work as a coherent system with minimal middle-management. All individuals and cells can identify their

67 place and role in the system, as the metrics that define their activities directly measure how they contribute to the end results (Feld 2001: 40-42). With current information technology it is not difficult to provide any individual within the organisation with any and all of the metrics in the organisation in real time, interpreted into meaningful forms like charts and diagrams where necessary, enabling a kind of total system visibility that makes the mass-production chains of communication and command almost entirely redundant (Hawken, et al. 1999: 66-68, Black 2000: 178-80, 84-85).

Aside from

improving micro-scale planning at the cell level, pervasive and widely available metrics also assist macro-scale planning in allowing overall performance trends to be plotted and scenarios to be simulated in order to perform whole-system optimisation and longterm strategic planning (Feld 2001: 36-38).

The effective deployment and utilisation of metrics represent an automation of management. Based on a limited set of requirements and specifications for a final product given by top management to the end of the work chain, cells and individuals are able to determine their own activities to meet the objectives. The requirements and specifications subdivide and cascade up the process web, and each cell adjusts their own metrics to target at their requirements and specifications. The top management then monitors these metrics, making macro-scale system adjustments to ensure the targets are met, such as adding new cells or directing specialised assistance to existing ones (Feld 2001: 42-43).

This is one of the primary lean aspects of lean organisation

management: the management structure is small, fast, and responsive.

3.4.3. SIPOC and Kanban

SIPOC is the acronym for Suppliers-Inputs-Process-Outputs-Customers and kanban is the Japanese term for “signboard,” although in English usage it has come to mean a specific demand signal sent to a work cell to indicate that a customer requires work to be done.

They represent the most significant cultural differences between mass-

production and lean production, and form the basis of lean logistics. As described earlier, lean management is explicitly focused on customers and results, and processes

68 are fluidly utilised to achieve these results. This is summed up in the term SIPOC, representing a way of understanding everything the organisation does as a kind of metabolic process that takes inputs from suppliers and performs the necessary process upon them to create the outputs specified by the customers (Feld 2001: 45-46). Under such logic, every element is a module with a specific place and purpose within a larger system. This physically translates into the work cells, which exist as autonomous processing units that take inputs from upstream cells and provide outputs to downstream cells. SIPOC is also scalable, in that each cell may be divided into smaller discreet operational steps with inputs and outputs, while a cluster of related cells may also be understood as a medium-scale module within the larger organisation.

The entire

organisation may be understood as a module of the regional economy, while a region may be understood as a module of the global industrial system. SIPOC thinking ensures that all processes and systems, regardless of their scale, meet a specific customer need (Feld 2001: 52-53).

The kanban is a physical implementation of this SIPOC thinking. Basically, a kanban is a demand signal sent from a downstream cell or external customer to an upstream cell or an external supplier, specifying what is required and how much of it is required. The signal itself is generally a fairly ordinary token, sometimes with the specifications of the product incorporated into it, or sometimes it is a container that holds exactly the amount of product required by the customer. The significance of the kanban lies not in its form, but in the rules governing its use. First, no work is to begin until a kanban signal is received by a cell, and the work stops once the kanban is fulfilled. This has the effect of limiting the volume of work-in-progress to a minimum, therefore limiting the amount of capital tied up in work-in-progress, limiting the storage costs of work-in-progress, and reducing the “inertia” of the system in that any changes in the product specification would not result in a large, costly stockpile of obsolete work-in-progress (Black 2000: 180-81). There will usually be at least three kanbans for any specific product flowing between two cells. The supplier cell will have one kanban being filled, the customer cell will have one kanban being emptied, and between them there would be one full kanban as buffer. If the supplier cell fills its kanban before the customer empties its kanban, then the supplier cell will stop work on that product, and there will be two filled kanbans as buffer. If the customer cell empties the kanban before the supplier cell fills its kanban, then the now-empty kanban will be sent to the supplier cell and the

69 customer cell would receive the full buffer kanban. The supplier cell, seeing one empty kanban in addition to the partially empty one it is working on, will know that it is necessary to increase the speed of production (Feld 2001: 54, White 2000: 169). This represents the second major lean aspect of lean management: only the work that is needed is produced, and resources are only committed to the work when the work is needed.

While kanbans are effective, they are not easy to implement. Work cells need the flexibility to be able to plan and prioritise their own work to effectively meet the kanban demand signals (Feld 2001: 47-49). In the ideal situation, each kanban will hold only one item of the product, effectively reducing work-in-progress to zero, but also requiring all cells to meet kanban demand signals instantaneously. This kind of “justin-time” manufacturing represents an ideal of perfect flexibility and zero waste. Obviously, in the real world, there are inevitably some delays involved with ramping-up and ramping-down production, with competing priorities, and with unanticipated stoppages. These necessitate larger kanban sizes to maintain just enough work-inprogress buffers to ensure smooth operations, but it also makes the system less lean (White 2000: 170).

In other words, effective implementation of kanbans requires

proficient work cell management and effective techniques to minimise the time it takes to switch production configurations to quickly meet kanban signals. The goal is always to reduce kanban sizes and to produce and deliver to the customers just in time.

Practical cell-level tools that enable effective kanbans include matching a product’s demand profile (continuous demand, intermittent demand, or one-off custom work) with production strategies (small kanban, batch and stockpile, special projects) (Feld 2001: 50-51), mapping processes and routing to understand cell function, and cell reconfiguration for workflow optimisation. These tools are used to analyse and better understand the relationships between cell activity and customer needs, and to better align cell activity to these needs, while activities that do not contribute towards meeting a customer demand are eliminated from the cell (Feld 2001: 61-72, Hawken, et al. 1999: 125-27, White 2000: 170-71).

70 3.4.4. Lean culture and continuous improvement

After an organisation is arranged into semi-autonomous work cells, utilising meaningful metrics to provide a SIPOC focus to all of the organisation’s activities, the final requirement for a lean organisation is to institute a lean culture of continuous improvement. It is pointless to create a system that enables flexibility and adaptability if this is not taken advantage of. A lean culture is one that is open minded, results oriented, challenges the status quo, and continuously refines its processes to attain better results (Feld 2001: 8-9). This is essentially what the cell members are employed to do: more than just machine operators or simple labourers, cell members are constantly engaged in the more creatively challenging and higher value-adding task of redesigning and improving the system itself.

Where the mass-production system relies on

conformity and endless repetition, the lean organisation places its emphasis on continuous change and refinement.

The first aspect of lean culture is concerned with process control, stabilising the current configuration to ensure that achievements in performance standards are maintained. Common tools used for process control are the Single-Minute Exchange of Dies (SMED),

Total

Productive

Maintenance

(TPM),

poke-yoke

(failsafe),

5S

(housekeeping), visual controls, and graphic work instructions (Feld 2001: 79).

The first three tools are concerned with machinery and equipment. The term SingleMinute Exchange of Dies comes from comes from the work at Toyota in the late 1950’s to reduce the time it took to change the dies used in the stamping machines that shape car bodies, and has since come to describe any effort to dramatically reduce the time it takes to switch machinery and equipment from one mode of production to another. Where retooling times are long, it becomes expensive to stop the machines to change modes of operations, and this cost becomes a barrier to flexibility. SMED involves reducing downtime by minimising the work that needs to be done while the equipment is stopped, modifying the equipment to allow more of the difficult retooling tasks to be done in preparation while the machinery is still running, making the actual machine stoppage as short as possible, and simplifying all the retooling steps as far as possible. Total Productive Maintenance aims to eliminate equipment breakdowns by utilising

71 preventative maintenance, corrective maintenance, and maintenance prevention. Preventative maintenance is a program of regular, scheduled maintenances done to keep equipment in good working order and to detect and remedy potential problems and breakdowns before they happen. Corrective maintenance analyses any breakdowns or potential concerns identified in the preventative maintenance and redesigns the equipment so that the problem will never be able to occur again.

Maintenance

prevention goes even further to design equipment and processes that are inherently easy to maintain, or do not require maintenance at all. Poke-yoke is mistake-proofing, and is concerned with designing processes and equipment that are intuitive, being extremely easy to use correctly and extremely difficult to use incorrectly. Poke-yoke devices are process-specific, but may include such strategies as parts that can only fit together in one way, automatic sensors for detecting parts that are out of tolerance, and integrated templates and measurements incorporated into the equipment (Feld 2001: 80-85). In combination, these three categories of techniques create tools that are simultaneously more flexible and more precise.

The second three tools are concerned with human behaviour and communication. The 5S are Japanese words that roughly translate to sifting, sorting, sweeping, standardise, and sustain.

These are housekeeping tasks to regularly clear the work area of

unnecessary items, labelling and storing items that do belong in the work area, sweeping and tidying up on a regular basis, having the discipline to maintain the housekeeping activities, and for the management to lead by example in clarifying expectations, rewarding performance, and constructively disciplining non-performance.

Visual

controls focus on the arrangement of the work space so that the entire space may be visually surveyed quickly to determine if operations are running smoothly. It also includes effective signage and prominently visible records of cell performance and communications. Graphic work instructions are printed large, in colour and located in convenient places, providing a more effective method of communication than lengthy written instructions that few people are likely to read (Feld 2001: 86-90). These tools are the most basic and immediate manifestation of the lean culture that should permeate the entire lean organisation.

72 The final outcome of the lean organisation management is that it actively and continuously improves it processes and equipment. This is the culmination of all of the lean management principles. Utilising the semi-autonomous work cell that is inherently flexible and empowered to make its own decisions about its own processes, utilising meaningful metrics focused on aligning process performance with end results, each member of the organisation constantly adjust and refine their actions to achieve better results. Each cell works as a team to solve problems that are effectively communicated within and between cells through visual charts and signs. The cells routinely make large scale reviews of its processes and perform upgrades and improvements. Each cell is responsible for maintaining and improving its relationships with suppliers and customers (Feld 2001: 91-92, Fawcett and Cooper 2000: 36-43). This is the ultimate benefit of lean management: by transferring the decision-making authority from the middle-management down to the people doing the actual work, the management no longer gets in the way of people’s attempts to do their work faster and better. Instead, the workers are actively encouraged to take charge of their work, and are rewarded for it. More efficient and higher quality work is possible because the system is freed from an unresponsive and ineffective authority structure, freed from technology and process lock-in, and freed from a workforce who, under a mass-production paradigm, would rightly have believed that their efforts won’t change anything (Hawken, et al. 1999: 98, Womack, et al. 1991: 13-14, Black 2000: 181-84, Swink 2000: 25-32).

73

4. Common themes for a systemic sustainability2

This chapter draws out the common threads from the concepts and strategies of the four fields that suggest an emerging, systemically sustainable paradigm for the entirety of human activity.

These threads fall into three major categories: whole-system

perspective, which serves as the counter-balance to the problems of professional isolation in division of labour; networked modularity, which provides the model for managing complex and non-linear systems, and; pervasive knowledge, which provides the tools with which unsustainable material- and energy-intense mechanisms may be substituted by ones that are knowledge-intense. While the ideas are divided into three categories for convenience, it should be stressed that they are three interdependent facets of one paradigm. Additionally, there is no clear distinction between cause and effect as this systemic sustainability is made up of many mutually supporting elements, the interactions of which cannot be adequately understood through reductionist causeeffect analysis. Ultimately, it is hoped that this systemically sustainable thinking will allow humanity to successfully transition from an unviable, resource depleting and environmentally degrading industrialism into to a mode of operation that can continue to function and develop in the context of global limits.

2

While the application of systems theory to design is not new, it has certainly evolved. As an example, Handler’s Systems Approach to Architecture (Handler 1970) is an early work that attempted to address architecture in a systemic manner, but which ultimately resorts to economic cost/benefit analysis which entirely fails to factor in the impact of externalities and imperfect knowledge.

74

4.1. Whole-system perspective Perhaps the most important facet of systemic sustainability is the emphasis on maintaining a whole-system perspective while pursuing specialisation and division of labour.

Despite the successes of specialisation, there is a natural tendency for

specialists to become increasingly isolated from one another as they each focus on their own field of work, eventually resulting in miscommunication and conflicting priorities unless the whole-system is carefully managed.

In economics, we can see that

externalities often manifest in the failure to take into account the essential environmental and social inputs into systems, which are too often considered purely in material and economic terms. In industry, we can see that the mismanagement of process residues is the failure to consider the longer-term and larger-scale potential and implications of these process outputs. In urbanism, we can see that the dysfunction of sprawl is the cumulative result of individuals avoiding the great underlying challenges of maintaining successful cities, which requires entities that can coordinate urban development and solve problems at both the neighbourhood and the regional levels in an inclusive and interdisciplinary manner. In organisation management, we can see that the problems with the bloated and inflexible hierarchical management of massproduction are overcome by breaking down barriers between isolated professions and aligning each worker’s activities with the capabilities of suppliers and the demands of customers. In all cases, the proficiency enabled by the division of labour must be directed by a whole-system perspective that prevents isolation, externalities, and other dysfunctional system behaviour.

4.1.1. Trans-boundary outlook

Obviously, the first and most basic principle of whole-system perspective is to understand that conceptual boundaries are sometimes obstacles to be overcome. The perception of boundaries is ultimately an essential function of human cognition; we deal with the complexity of the world by identifying and separating discreet objects and

75 ideas in order to label and manipulate them. However, problems arise whenever this conceptual separation is significantly at odds with physical reality.

For example,

industrial thinking treated “humanity” and “nature” as separate categories of things, despite the reality that humanity routinely appropriates and utilises natures’ materials as resources, while discarding wastes back to nature. In other words, the actual physical boundary between humanity and nature was always tenuous and highly permeable, while our perceived conceptual boundary was substantially more defined and distinct. As stated in the opening chapters of the book, the correction of this misalignment began substantially in the 1970s with the advent of the environmentalist movement. The interconnectivity between humanity and nature, and humanity’s dependence on nature are ideas that have since been increasingly ingrained into our contemporary culture, although the translation of environmental awareness to environmental action is far from complete (Gibson and Peck 2006: 139-40).

To return to the beginning of industrialism, Adam Smith’s pin-making workshop example divides the craft of pin-making into eighteen steps performed by about ten people, and in doing so dramatically increases the productivity of those workers by taking advantage of the economies of specialisation. While this is impressive, it is not a foolproof strategy for success. The problem is the fragmentation of skills: while each worker is proficient at making one part of a pin, none of them need to know how to make the entire pin from start to finish. With such dramatic productivity benefits resulting from the division of labour, there is a disincentive for the workers to think beyond their own segment of the work and be distracted from their specialisation. However, regardless of the workers’ conceptual boundaries about what their work is and isn’t, the reality of pin-making is that the transformation of steel from rolls of wire to packets of pins is a continuous process, inextricably linked to steel suppliers upstream and pin buyers downstream. It is only the process as a whole that has any value; nobody would buy a pile of pinheads or unsharpened pins. In order to keep the workers’ efforts aligned to reality they must be constantly aware that they are in the business of making pins, not making parts of pins.

Without a whole-system

perspective, it becomes possible to make decisions that make sense to one specialisation but which proves detrimental to the process as a whole.

76 The many challenges that may be faced by a pin-making operation inevitably require trans-boundary thinking to overcome.

If the customers require different types or

quantities of pins, the change in the product requires successful coordination between all of the specialisations. If the suppliers are disrupted and alternative materials need to be sourced, the adaptation to new types of raw materials will require adjustments in all of the specialisations. If a competing workshop manages to make better pins for a lower price, the only way to meet the challenge effectively is for all the workers to redesign and reconfigure the entire process to improve it. The success of the workshop, therefore, requires both the division of labour for high productivity and a transboundary, whole-system outlook for strategic direction. Traditional mass-production addresses this by adopting separate classes of workers, professional engineers and managers, to handle the system-scale strategic tasks. Even so, these individuals are equally susceptible to the incentive towards the fragmentation of skills since they adopt the same productivity strategy of dividing labour.

The need for a trans-boundary outlook to overcome the problem of functional isolation in industrialism is recognised by all four fields of sustainability study discussed in this thesis.

The use of full cost accounting in environmental economics to capture

externalities makes companies and individuals take into account the wider costs of their activities beyond what they may conventionally consider to be their realm of responsibility, while the management of incentives and disincentives is essentially managing the transfer of costs and benefits across organisational boundaries, such that individual activity is motivated by and aligned with external conditions. The ecological metaphor adopted by industrial ecology seeks to break the conceptual boundaries between isolated processes and companies by focusing on the continuous metabolic flow of materials between processes. Sustainable urbanism is premised on a transboundary, interdisciplinary approach to urbanism, recognising it as an inseparable combination of physical infrastructure, economic activity and social interactions, and also recognising that optimal solutions will not be found by approaching these separately in a piece-meal manner. The advantages of the lean management system are founded on the multi-skilled work cell that focuses on meeting external requirements. In all cases, it is essential for all individuals and organisations to look beyond internal processes. It is not that there are no boundaries or distinctions between individuals; rather, it must be understood that boundaries are fluid and highly permeable, and that

77 nothing ever happens in isolation from its context (Dale 2006: 10, Hawken, et al. 1999: 129-31, Gibson and Peck 2006: 139-40).

4.1.2. Inclusivity of ownership

The move towards trans-boundary thinking implies a redefinition of the concept of ownership, or the possession of exclusive rights and control over property.

The

industrialist approach to ownership is well represented by such conventional wisdom as “a bird in the hand is worth two in the bush.” The wisdom in this proverb, that a small but real and tangible possession is worth more than greater potential possessions in the future, depends on the assumption that the “two in the bush” is of negligible value until it comes into the possession of the “hand.” This is not the case with real birds, which, among other things, provide such ecological services as controlling insect populations, pollinating plants, dispersing seeds, and being prey to higher predators. The state of human technology and ingenuity is such that, if we were willing to make the effort, we could most likely capture all the birds in any particular bush, although anyone who has any understanding of ecosystems and sustainability would realise that, while profiting the hand in the short term, it ultimately only results in poverty in the long term as the ecosystem of the bush is irreparably damaged. In the sense that humanity can capture any bird in that bush anytime it wishes, and indeed holding the power of life and death over the entire bush and anything within it, humanity already has absolute rights and control over the entire bush. It is redundant to count how many birds one has in the hand and how many birds are left in the bush when the entire bush is, for all practical purposes, already “in the hand.”

This practical ownership by humanity extends across the entirety of the planet’s surface and atmosphere that is within the reach of human technology. The entirety of the planet’s remaining forests can be converted to timber inventories if we so choose, although doing so would obviously be disastrous for the biosphere. All the fish and edible sea life in the planet’s oceans can be caught, canned, and placed on supermarket shelves if we so choose, with equally disastrous consequences. We may even be able to

78 control the temperature of the planet’s surface, raising it by releasing greenhouse gases into the atmosphere or reducing it by using nuclear devices to throw dust into the upper atmosphere in order to block out solar radiation, although it is unlikely that doing either would bring any benefits to humanity at all. As noted in the opening chapters of this thesis, it is no longer a question of whether we can “conquer” nature, but rather it has become a question of what should we do with nature now that we have “conquered” it. Tragically, it appears that we are actually already heading towards converting all of the planet’s forests into timber inventories, all of the oceans’ sea-life into packaged foodstuffs, and adjusting the planet’s climate patterns by changing the composition of the atmosphere, all without any real intention to face the disastrous consequences that will come if should we ever “succeed”.

While this concept of total ownership and therefore total responsibility is not a difficult one, its difficulty lies in the fact that individuals tend to consider ownership in terms of individuals, not ownership in terms of humanity as a whole. To return to the pasture and the herdsmen in the tragedy of the commons analogy, tragedy results from considering the pasture as owned by no one and used by everyone. The health or destruction of the pasture is dependent on the actions of the herdsmen, and therefore for all practical purposes the herdsmen control the pasture. The idea that the pasture is not “in the possession” of anyone simply leaves room for externalities and mismanagement. In order to effectively manage the pasture, the herdsmen must come to understand that each of them owns a share in the wellbeing of the pasture and that they must somehow devise a mechanism for managing the pasture, either through mutual agreement or engage in some sort of conflict to determine who should have exclusive ownership over the pasture. Having decided on the ownership of the pasture, the ownership status of the herds that are dependent upon the pasture also changes. Shared management of the pasture, by necessity, also means something of a shared management of the herds, as the herdsmen must come to a mutual agreement on how each herd is given access to the pasture. In a sense, each herdsman also has partial responsibility of each of the other herdsmen’s herds, as each of them must ensure that none of them abuses the system. This idea of practical ownership is separate from legal ownership; if one has the ability to exert some influence over the property, then one can be considered to own a share of it, regardless of whether its legal status (Stahel 2003: 273).

79 In a sense, legal ownership is an approximation of practical ownership. In the herdsmen metaphor, the pasture represents any public and unrestricted resource, and the herdsmen represent all individuals who use that resource. In reality, this means that all of the planet’s resources must not be considered as owned by no one and enjoyed by everyone, but rather as owned and managed by everyone. To do otherwise would render these common resources susceptible to destruction through non-management. ownership may be implied or explicit.

This

For example, with regards to the Earth’s

atmosphere, an implied shared ownership would mean that individuals and organisations are obliged to ensure their actions do not damage the atmosphere at the expense of the whole of society, while an explicit shared ownership would the establishment of a shareholding system where every individual on the planet owns an equal share of the resource. Under such a shareholding system, the management entity tasked with the administration of the atmosphere would have to determine how much of it must necessarily be allocated to natural ecosystem and weather system functions, determine how much and in what manner human activity can safely and sustainably utilise the atmosphere, and to allocate this amount to the human population as “dividends” for their shareholding. At present, humanity seems to be heading towards an atmosphere management system that is explicit, at least at the global and regional level, as represented by carbon trading initiatives where the ownership of the right to emit carbon into the air is explicitly defined and traded. The ownership has been implicit at the local level, where emission standards are sometimes mandated and violations punished, but the right to emit pollutants are not quantified or traded in the context of global maxima limits. In either case the shared ownership of and, therefore, shared responsibility for the atmospheric resource must be recognised and enforced.

Until the ownership of the world’s resources is understood, there will inherently be gaps in their management. This includes the world’s oceans, freshwater and groundwater, ecosystems, societies and communities, and any other intangible factor that contribute to human wellbeing (Lister 2006: 24-25).

80 4.1.3. Customer Success

An inclusivity of ownership encourages comprehensive management of resources, but it does not necessarily result in good management. The concept of customer success is a trans-boundary approach to supplier-customer relations.

To illustrate, strategies

concerning how an organisation deals with its customers may be divided into three categories, customer service, customer satisfaction and customer success, representing increasing sophistication and an increasingly trans-boundary understanding of its activities (Fawcett and Cooper 2000: 36-43). At the most basic level of customer service, an organisation may consider itself to be the provider of a set of services, and that those individuals or organisations who have a need for those services and who will purchase them are the customers. At this level, the focus is entirely on optimising internal processes and coming up with more efficient ways to provide a fixed set of services. Value flows in one direction, from the supplier to its customers. With customer satisfaction the organisation becomes concerned with the opinions and feedback of the customer. This attention from the organisation towards the customer arises from the need to attract new customers and to retain existing ones in the face of competition. By collecting and analysing customer feedback, the organisation attempts to keep its customers satisfied by adjusting its processes and its offerings.

The

boundary between the organisation and its customers becomes more permeable, with value flowing downstream and feedback information flowing back upstream. At the level of customer success, the organisation views its customers as strategic partners and allies, taking a close interest in their processes and providing services and products that are tailored to improve their competitive advantage.

In this type of symbiotic

relationship, the supplier organisation actively strives to ensure the success of its customers, which, in turn, translates to greater demand for its own offerings. In other words, the supplier and the customer share the ownership of each other’s success.

Clearly, this altruistic strategy overcomes the problem of divergent incentives between the supplier and the customer, wherein the supplier may attempt to profit in the short term at the expense of the customer. The desire for stability in the supply chain and the threat of losing customers to competitors are significant motivations for the development of such a close symbiotic relationship between supplier and customer.

81 The shortcoming of such a relationship is that it tends to lock the supplier and customer together into co-evolution. Symbiosis inherently requires substantial investments of time and goodwill from both parties, possibly at the expense of developing relationships with other potential suppliers and customers. When the supplier-customer relationship becomes so close that they effectively behave as one organisation, each party becomes highly susceptible to the failures and inefficiencies of the other.

Effective

implementation of a customer success strategy may require managing relationships to take advantage of mutual trust and cooperation while avoiding being overly dependent on a small number of critical partnerships.

Despite the caveat, the attention to customer success represents a crucial element of whole-system thinking, as it basically represents companies finding mutual profit in whole-system optimisation. The idea is that a company’s profitability is as dependent on positively influencing external factors as it is on improving internal processes. The altruistic strategy of customer success is an integral concept in systemic sustainability. Particularly in environmental economics, the shifting of focus from products to services is essentially a strategy to ensure the transition from customer service to customer success.

In the simplest customer service situation, the relationship between the

supplier and the customer is reduced to the single instant of transaction, focused on determining a price for a product at a particular moment in time. The supplier and customer need have nothing more to do with each other after the event. The addition of a product warrantee extends the relationship to a form of customer satisfaction, where the customer is entitled to a certain expected level of performance from the product. Whether the product is, in fact, of benefit to the customer is entirely the customer’s responsibility. When the basis of transaction is shifted from the physical product to the services rendered by it, the focus is naturally placed on meeting the customer’s specific needs, and the supplier’s continuing profit is directly tied to the value the service adds to the customer’s processes. In the other fields, the effort to improve the upgradeability and recyclability of products in industrial ecology ultimately means creating and retaining value for the customer and other actors further downstream, while the focus of sustainable urbanism is on creating cities and neighbourhoods where citizens can prosper and thrive, beyond the mere provision of urban infrastructure. In all cases, a whole-system perspective reveals the benefits of a pragmatic altruism (Hawken, et al. 1999: 286-88).

82

4.1.4. Suppliers – inputs – process – outputs – customers

SIPOC, already discussed as a component of lean management, deserves further elaboration as an essential strategy for implementing and managing whole-system coordination initiatives. The reason why attention needs to be paid to whole-system thinking in the first place is because the whole-system is inevitably impossibly complex, and therefore simplifications and assumptions are made to make the situation manageable. It is these simplifications and assumptions that result in externalities, which ultimately result in system dysfunction. Whole-system thinking is not about trying to process and make sense of the entirety of the complexity, but rather it is about a strategy for successfully managing this complexity without ever having to fully make sense of all of it. This is what SIPOC enables (Gibson and Peck 2006: 139-40).

SIPOC is the consideration of processes in relation to upstream and downstream processes to ensure that they remain relevant and useful in their context. So long as the suppliers and customers can be safely assumed to not be acting in contrary to wholesystem optimisation, the process can align itself to provide for customer success without having to plan for the whole system. As the system cascades up- and downstream to other processes that also follow SIPOC principles, the system becomes self-optimising in a decentralised manner. The problem of complexity is avoided as each individual process only needs to understand itself and its immediate up- and downstream processes in any significant detail. Additional whole-system direction can be provided by entities with an overseeing role who need not understand any of the individual processes in any great detail, but only their contributions to and effects on the system. When system adjustments are necessary, modified demand signals are sent to key processes so that the changes cascade throughout the system of self-managing but highly interconnected processes.

With SIPOC, the primary challenge is correctly identifying and understanding suppliers and customers. If externalities are to be taken into account, a trans-boundary approach is required in the identification of suppliers and customers.

For a manufacturing

83 organisation, for example, in addition to such considerations as materials, capital and labour, inputs and outputs also include such current externalities as the atmosphere and social capital. For organisations engaged in resource extraction, disposal or recycling, inputs and outputs significantly affect the atmosphere, surrounding ecosystems, hydrological systems, geographic systems, and local communities. Under the current economic system, it is unlikely that the organisations will be motivated to factor these “suppliers” and “customers” into their decision-making voluntarily, yet this is precisely what is required.

The role of SIPOC in environmental economics and industrial ecology is fairly straightforward. The concept of environmental and social suppliers and customers enables SIPOC thinking as a strategy for negotiating environmental economic concerns, while industrial ecology demands the application of SIPOC to residue streams to ensure their proper management. The application of SIPOC to urbanism is more complicated, as the urban environment is intimately related to the countless day-to-day activities that all individuals take for granted. The official responsibility for supplying physical urban infrastructure may partly be provided by local governments, partly by national governments, and partly by private companies, all of whom are distant from the day-today users of the urban environment. Conversely, the customers of the physical urban infrastructure are continuously present and rely on the infrastructure for all their day-today activities, although this interaction is almost entirely uncontrolled and unpredictable. The reciprocal of this is the money that goes from the users to the providers, in the form of tax monies or fees, which do not have any direct accompanying mechanism for the feedback of how well the infrastructure contributes to customer satisfaction or success. This distance between suppliers and customers is not conductive towards SIPOC thinking, and this must first be addressed before there is any possibility for the application of whole-system urban solutions.

84

4.2. Networked modularity A large scale application of SIPOC thinking naturally leads to a network of processes interlinked into an intricate web-like system.

Combining the advantages of

specialisation and division of labour with a trans-boundary SIPOC outlook, networked modularisation strives to capture the best of both worlds, while negating the limitations of each.

4.2.1. Decentralisation and consolidation

On the surface, the concepts of decentralisation and consolidation seem to be contradictory; decentralisation, in the most simplistic sense, is the de-concentration and distribution of knowledge and decision-making authority, while consolidation is to concentrate them. Neither is useful in extremes, and the goal is to find and implement the optimum levels and forms of concentration for each type of knowledge and authority for each particular situation (Hawken, et al. 1999: 127-28, Low 2001: 206, Graedel, et al. 1995: 329, Stahel 2003: 273-74). To take the semi-autonomous work cell of lean management as an example, routine day-to-day decision making is decentralised from a traditionally middle-management role down to the work cell level, while the application of individual skills and specialisations are consolidated from individual workers up to the work cell level, and long-term strategic planning remains centralised at upper management. In all cases, authorities and responsibilities should be placed at the level where they can be the most effective, depending on the skills and mechanisms that are available to manage them. Networked modularity is not the selfreinforcing centralisation of authority and power that is a feature of the mass-production hierarchy, nor is it a kind of anarchic ideal of spreading authority evenly and equally to all individuals. Instead, it deals with the entire continuum of possible degrees of centralisation, applying different models in different situations and at different levels, changing with the circumstances and striving for an optimum mix and balance at all times.

85 The issue of decentralisation is not simply the relinquishing of authority by those who currently hold it.

Instead, it is the establishment of streamlined and automated

communication and decision-making structures that reduce or eliminate the necessity for micro-management by a centralised authority. Decentralisation will naturally occur when these structures are in place and functioning, and direct micro-management from the centralised authority has become unnecessary.

Successful and structured

decentralisation is the desired outcome, not the means to achieve then. Decentralisation without the establishment of mechanisms for efficient and effective decision-making will lead to non-management and externalities, the same tragedy of the commons that results from decisions made in isolation from their context in an unstructured manner. Likewise, the consolidation of decision-making is not about the simple transfer of authority from the many to the few, or the indiscriminate creation of management hierarchies where none existed before. The consolidation of decision-making structures is the creation of knowledge communication systems that enable the inclusion of widersystem knowledge into existing or revised decision-making systems, and the creation of larger-scale authority mechanisms where they are needed but do not yet exist. To return to the herdsmen example of the tragedy of the commons, it is essential that each herdsman understand not only the interaction of his own herd with the pasture, but also that of each of the herds of the other herdsmen, and also the effects of their combined activities. In this situation, it is necessary to consolidate the management of the pasture, even as each herdsman retains responsibility for the day-to-day actions his own herd. This is what is meant when systems are to be decentralised and consolidated at the same time; the scale and form of each management aspect must be matched with a corresponding management mechanism.

In terms of environmental economics, it is recognised that it is necessary for governments to enforce a certain minimum level of environmental responsibility as a bottom line for minimum standards of behaviour, which translates to such things as emission standards, harvest quotas, and the like, and that these limits should ideally be based on empirical evidence of the ability of the ecosystem to renew resources and assimilate the various outflows of residues from human activities. However, it is also recognised that incentives should be in place to encourage industries and individuals to continuously reduce their environmental impacts, and that individuals and organisations should be given the freedom and the incentives to devise new technologies and

86 methodologies to achieve this. Without such incentives for continual improvement, people are likely to match the lowest mandated standard and go no further. In this, we can see the matching of the scale of the concern to the level of centralisation of management: The limitation of environmental disruption to the carrying capacity of the global system is maintained by equally globally consolidated entities, in the form of national governments and international agreements between them; the responsibility and incentives for continual reductions in environmental disruptions are given to individual companies and organisations, who have the flexibility to devise, test, and implement new processes in an agile manner.

Mediating the interaction between the global

carrying capacity concern and the local process improvement concern is an incentive/disincentive system that appropriately rewards environmentally benign activity and punishes environmentally damaging ones. This arrangement is far more likely to succeed than one where the national governments attempt to mandate specific technologies in a blanket manner for all situations, or where individual companies and organisations are simply allowed to determine for themselves their appropriate level of environmental accountability, either through market mechanisms or independent research. In the first case, the mandating of technologies has the effect of discouraging innovation, while the latter allows the exploitation of externalities. Industrial ecology follows a similar pattern of government-managed incentive/disincentive structures directing the self-management of individual companies and organisations, with the proposed creation of a market of residues reinforced by severe disincentives for unmanaged residue outflows into the environment.

In sustainable urbanism, under current conditions, there exist two significant categories of management entities: civic governments that are small in number and extremely centralised; and individual citizens who are large in number and extremely decentralised. The provision of physical infrastructure and related services are managed by the civic governments, funded by compulsory taxes on the citizens. Positive social externalities, in the form of communities, neighbourhood character, civil society, and the like, are provided by the combined actions of all the individual citizens, although these are invariably externalities since they are unmeasured and unmanaged. What is unknown is whether there may be more effective arrangements than that which currently exists.

Following the principles described so far, the existing civic

governance mechanisms should deal only with city-scale planning and management,

87 and a neighbourhood-scale management level should be established in order to monitor and manage the general maintenance of street-scale infrastructure, contracting more professional services where substantial works and specialist skills are necessary. Similar “body corporates” currently exist as organisations for the collective management of private property, especially in multi-tenancy buildings. Any move away from suburban sprawl towards higher population densities will inevitably increase the number, variety, and scope of such organisations.

Obviously, the relationship

between city-scale, neighbourhood-scale and individual management entities have to be carefully designed to direct the appropriate tasks and responsibilities to the appropriate level of management, and that information and incentives are appropriately transferred between the levels.

4.2.2. Connectivity and interdependence

When there are appropriate management mechanisms for the different levels and aspects of the system, it becomes important that these mechanisms be effectively connected with each other so that they combine to form a coherent system. One of the primary themes of this thesis is the notion that nothing exists in isolation, that everything is tied together in an intricate web of interrelationships (Kazazian 2003: 85, Côté and Wallner 2006: 117-24, Graedel, et al. 1995: 8). As such, in adopting the network of modules as the organisational principle for successfully managing complexity, what occurs between modules is equally as important as what happens within modules. The continuous flow of changing materials, energy, data, expertise, and all forms of capital throughout the system constitutes its metabolism, the efficacy of which is a primary measure of the success of the system (Lister 2006: 22-23).

Almost all of the aspects of all four fields of systemic sustainability involve optimisations of the connections between system elements.

In environmental

economics, the successful internalisation of externalities involves devising mechanisms of information and data transfer that is capable of communicating the full spectrum of costs and benefits in a manner that does not burden the system with data overload.

88 Unless the full spectrum of costs is somehow communicated to all relevant elements in the system, those who create the costs remain sufficiently disconnected from those who bear the burdens for externalities to persist. Likewise, the effective deployment of incentive/disincentive systems and the transition from a product-based economy to a service-based economy are both fundamentally concerned with optimising the connections between producers and consumers by ensuring that the right information and the right incentives are passed to those who can most effectively act upon them to prevent system dysfunction. Particularly with the shifting of economic focus from products to services, the interdependence of the provider and the user of services becomes more accurately reflected by the terms of the exchanges.

For industrial ecology, the industrial model most commonly envisaged is one where companies from a range of industries co-locate together and establish a mutually supporting network of material exchanges, and where, through careful balancing of processes, undesirable or unintentional outputs are reduced to a minimum. This is the creation of new relationships and new connections where none existed before, and the nurturing of a new interdependency whereby the cooperation between these companies may produce an overall sustainable system. As noted in the discussion of the three metabolism types, immature metabolisms are characterised by low diversity, high material throughput and lack of integration with environmental processes. On the other hand, mature metabolisms are highly diverse, with almost total internalisation of material flows and close integration with the environment. In other words, mature metabolisms that are viable in the long term are comprised of a large number of interdependent elements that are connected together by an intricate web of material and energy exchanges, and this applies equally to industrial ecosystems and natural ecosystems (Côté and Wallner 2006: 130).

In terms of sustainable urbanism, its primary critique of conventional urban design principles is their failure to acknowledge and address the deep interdependency between all aspects of the city.

Sustainable urbanism recognises that urban form and

architectural design are intimately related to resource use, economic activity, community, culture and civilisation.

To address any one aspect without equally

considering the others is ultimately futile. The primary purpose of the successful city is

89 to assist and enable meaningful, controllable and profitable contact between people, whether for commercial, cultural, or recreational exchanges. Indeed, the primary reason for the existence of cities is the benefit to citizens in the opportunity for profitable exchanges with each other. As such, a city is premised on useful connections, and all other aspects of the urban fabric arise from and serve this purpose. The motivation to sprawl, while initially intended to mitigate the adverse effects of the dense concentration of people that define cities, ultimately results in a culture of separation that runs against the fundamental purpose of cities. Sustainable urbanism seeks to rebuild the connections and to address the benefits and the necessity of pervasive interdependence in cities, while remaining mindful of the dangers of indiscriminate overcrowding.

4.2.3. Non-linearity

Linear thinking conceives of a process as something that takes a number of inputs, performs a series of actions on them one after another, and produces an output. The industrial revolution may be considered the successful and widespread application of linear thinking to identify and improve individual process actions, as seen in Adam Smith’s pin-making workshop, but this is also the source of industrialism’s problems and limitations. The reason is that, while processes are generally designed for one or a few specific purposes, they are seldom without secondary inputs and effects (Lister 2006: 18-21, Hawken, et al. 1999: 113-21, Hodge 2006: 159). If we return to Adam Smith’s pin-making workshop, we see that the process is conceived linearly, with steel wire entering the process at the start, a series of some eighteen actions performed to the material by skilled workers one after another, and a volume of pins exiting the process at the end. These are the things that are of concern to the profit-seeking industrialist. The secondary inputs would include such things water, air and lighting, while the secondary outputs may include process residues like metal filings, waste water, airborne particulates, and the like. Some of these secondary concerns maybe occasionally catch the attention of the industrialist when they negatively affect the pin-making operation,

90 but many of them would escape attention entirely as externalities. Certainly, Adam Smith did not take the time to mention them.

In order to capture these externalities, it would be essential for the industrialist not to consider the business of pin-making as a linear process of turning steel wire into pins, but as a segment of a web of processes, each of which have a number of inputs and a number of outputs. Significant consideration must be given to both the primary and the secondary concerns; the fact that a concern is not immediately urgent does not imply that its consideration is optional. Even as the complexity and the scope of industrial processes have increased dramatically in the evolution of industrialism, there is still an overwhelming tendency to consider them in a linear manner. For example, we naturally think that automobile factories make cars, while in reality an automobile factory makes air pollution, waste water, various other liquid wastes, scrap metal, plastic off-cuts, used packaging material, tired factory workers, heat, noise, and a myriad other things, as well as the cars. As discussed in industrial ecology, these secondary outputs must also be considered to the same degree as legitimate products. Therefore, an automobile factory is not simply a single process that creates cars, but a number of parallel and interconnected processes, occupying the same space and utilising the same equipment, that create a wide range of products. Indeed, if externalities are ever to be adequately addressed, all systems have to be assumed to be inherently non-linear, such that secondary input and outputs enter into consideration from the outset (Hawken, et al. 1999: 286).

A further aspect of non-linearity in industrial ecology is the concept of large-scale cyclicity. The aim of industrial ecology is to transform the industrial system into a model where the overwhelming majority of the material appropriated by the system cycles within it, with the most minimal of inputs into and outputs out of the system. In such a cyclic system, there is no discernable start or end to the process. Therefore, the linear idea of a process that takes an input, performs actions on it and produces an output is untenable. The ultimate desired result of the human industrial system, to enable human prosperity and a high quality of life, is something that is continuously produced by all of the activities throughout the system, as much the result of responsible residues management and unproductive leisure as it is the result of conventional

91 production and consumption. It is neither necessary nor desirable to allow linearly conceived individual processes to aggregate into a linear model for the entire human industrialism, as this translates to an unsustainable, resource depleting model for industrialism that emphasises material throughput and not necessarily true prosperity.

The other three fields discussed in this thesis are also concerned with managing nonlinearity. Environmental economics specifically criticises the market’s focus on the exchange of end products and the associated assumption that value is produced as a product. By placing the focus on the provision of services, the terms of exchange become a continuous negotiation for the duration of the service provision. Just as the human prosperity that results from the industrial system is continuously generated by the activities of the system and not a specific end product, the shifting from products to services will result in provider/user relations where the outcome is not the end of a linear process, but rather the continuous effects of system activities.

Likewise,

sustainable urbanism points out that desired outcomes from a city are the security, prosperity, and cultural enrichment of its citizens. The provision of infrastructure, housing, buildings and open space should be considered the tools, not the goal, of urbanism. While these may be the product of relatively linear processes of fabrication and assembly, they must be designed to exist and function as inextricable parts of intricate and highly interconnected networks of relationships. Lean management, while originally designed to streamline linear processes, ultimately enables the possibility of non-linear organisations. Where the mass-production assembly line is a direct physical manifestation of linear industrialist thinking, the autonomous work cell and streamlined connections of lean production frees the labour from the line, and each work cell can comfortably accommodate multiple suppliers, multiple processes, and multiple customers, so long as the cell is adequately staffed and equipped to handle the work. The cells may be linked together into a chain, but they can equally be arranged into a web-like network, providing a flexibility and system sophistication that is not possible in the basic assembly line.

92 4.2.4. Redundancy and upgradeability

The linear model of processes that perform actions in sequence is inherently fragile, as a breakdown in any one of the actions will halt the entire process. This is one of the major shortcomings of conventional mass-production. As a long and complex assembly line works in lock-step, any major problems will cause an expensive stoppage to the entire line, or if the problem is non-critical, as is often the case, the defects in the work will simply be passed down the line, to be remedied later. Furthermore, if any new methodologies or technologies become available for any particular segment of the process, the benefits cannot be implemented unless it justifies the cost of stopping the entire line in order to perform the system upgrade. The more complex the line, the more fragile and inflexible it becomes, as increased complexity increases both the number of parts that can fail and the costs of any stoppages. The irony is that the reduction of processes into linear series of actions was originally a mechanism for more effectively managing complexity.

A simple workaround for this fragility is to deploy multiple linear processes to run in parallel, such that if any one process breaks, the production potential is reduced but not eliminated. An improvement to this arrangement of independent and identical parallel processes is to allow for connections between the chains, such that work produced upstream in one chain may cross over and be continued in the downstream of another chain. In this case, the impact of disruptions can be further limited to only a segment of one of the chains, although such a disruption may cause a bottleneck that reduces overall system performance. The series of activities to be performed is still conceived as linear, but the mechanisms for the performance of those activities are arranged in a more web-like manner.

While such a system allows for the accommodation of

unplanned disruptions, the costs of planned disruptions are also greatly reduced, allowing for the maintenance and upgrading of process segments without incurring the unacceptable costs of stoppages. This kind of system redundancy and upgradeability is a significant purpose of the modular network model. The greatly reduced costs of making process improvements allows the system to more easily change and adapt to changing demands and contexts (Stahel 2003: 272).

93 This flexibility is further improved by the successful deployment of lean management model work cells, each one a careful mix of skill and tools. A feature of the work cell is that it is equipped to perform a range of related tasks without significant costs in reduced economies of specialisation. When cells are designed so that they can, at any time, perform any one of a limited range of process steps, then a disruption to any particular module need not cause a significant bottleneck of reduced performance, as the modules can shift their mode of operation to better address the shortage resulting from the disruption. As before, a process may be conceptually simplified into a series of actions performed one after another, but this does not mean that the physical production mechanisms will rigidly follow that model. In fact, because each work cell is capable of performing a range of tasks, and because the connections between the cells would necessarily be flexible and streamlined, the same physical system would be able to handle a number of different linear processes, and each one may be routed through the system differently. At this point, we reach the level of decentralisation that would be encountered at, say, the level of an industrial region, or a city, or an ecosystem, although the scale and scope of activities may not be as substantial (Lister 2006: 22).

When a system develops to this level, it offers possibilities beyond the design intention, and network economies dictate that further addition of more cells or modules will multiply the number of possible processes that can be routed through it. It is at this point that redundancy changes from a negative to a positive. Where simple duplication of processes provides for backup capacity at the cost of any economies of scale that may be achieved if only one high-volume chain was deployed, decentralised and wellconnected modular networks provides both redundancy and the opportunities that come with systemic flexibility and upgradeability (Lister 2006: 19-20, Panayotou and Zinnes 1994: 396). Critical to the success of such a system will be the ability to find the opportunities that may be hidden in the complexity, and the ability to coordinate and collaborate in the processes.

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4.3. Pervasive knowledge Throughout the thesis it has been repeatedly pointed out that the paradigm of systemic sustainability depends on effective communication and effective transfer of materials and incentives. This is the concern of pervasive knowledge and its enabling technology, information technology. To put it simply, the advent of widespread computing gave humanity the tools to meaningfully process vast amounts of information, at a scale and speed that had previously been unimaginable. In the early industrial age, limitations in the ability of the human mind to process data meant that complexity could only be managed through subdivision and isolation, fragmenting systems into small pieces controlled through a hierarchal command structure. As computers increasingly replace humans for the tasks of routine information processing, dramatically more information can be collected, processed, and transferred, more quickly and more accurately, meaning that many system details that were previously unknowable and unmanageable have now become accessible.

Utilised properly, this provides the potential for

drastically reducing the scope and impact of externalities. Naturally, new strategies have arisen that takes advantage of this enabling technology.

4.3.1. Integrated data collection

The first aspect of pervasive knowledge is the collection of data, which needs to be automatic, continuous, and performed at source if it is to be accurate and timely. In the ideal situation, the collection of performance data is designed from the outset to be an integral part of the process, with mechanisms to monitor all inputs, processes, and outputs.

With this data, it becomes possible to ensure that processes function as

intended, to the point that failing processes can be identified and corrected before process tolerances are exceeded and catastrophic failure occurs (Graedel, et al. 1995: 24, 329, Hawken, et al. 1999: 66-68).

95 To understand the significance of integrating the collection of data, it may be useful to compare it with less sophisticated alternatives. The most basic setup is to have no monitoring at all, but simply to assume that processes are functioning as intended until failure is unavoidably evident. Obviously, evident failure can mean catastrophic failure, which is likely to be more expensive to remedy than the costs of establishing a monitoring system that would have prevented it. However, failure can also mean partial breakdown and the introduction of defects into the output of the process. These defects may or may not be evident, and may or may not be tolerable to downstream customers. In the case that the defects escape notice, they are likely to contribute to some form of catastrophic failure downstream. Where the defects are evident, they constitute a loss of value in the output. Once again, one has to compare this loss of value to the costs of establishing process monitoring mechanisms, especially considering that partially failed processes tend to produce unanticipated effects, such as undesirable process residues and other externalities.

Since it is generally less costly to identify and remedy problems before they become catastrophic than to wait for things to go wrong, mass producers often implement quality control and preventative maintenance mechanisms.

The simplest form of

quality control is to inspect the process outputs and to test them for defects. Thorough inspection of all of the outputs may be prohibitively expensive and time consuming, and would be impossible altogether if useful testing involves irreversible damage or destruction of the item under inspection. The usual solution is to test only a limited sample of the output, and use statistical methods to extrapolate the results and estimate the quality of the total batch of products. The result is that defects are understood to be inherent to the products, counted as a probability, and this probability is determined at the end of the process as an outcome, and not at the point where the mistake is made. Preventative maintenance is regularly scheduled maintenance performed on tools and mechanisms while they are still functioning within tolerance. Wear and tear and other unavoidable degradation of mechanisms are periodically measured so that they can be remedied before catastrophic failure is expected to occur. The downside is that it that preventative maintenance equates to process downtime, and so its application is a tradeoff between the costs of the stoppages and the costs of failure. In both cases, the intermittent nature of the monitoring means that the awareness of the processes is not comprehensive, incorporating many unknowns and often only detecting problems some

96 time after they have occurred. Even when a problem is detected in the output products through quality control inspections, it may still be difficult to identify and fix the exact process failure that caused the problem.

Likewise, if preventative maintenance

uncovers a malfunctioning process, it still may not give any indication of how long the problem has persisted, how much and in what ways the output has been affected.

Until the advent of widespread computing, it was not practical to monitor processes in more detail than what is possible with end-of-line quality inspections and preventative maintenance. When the monitoring of processes is done by humans, the marginal benefits that may be derived from greater control over processes seldom justified the costs of dedicating people to continuously measure process performance. However, once information technology became available to automate this monitoring, it is possible to have mechanisms that tirelessly and continuously collect measurements from sensors that are embedded into the processes, highlighting anomalies if and when they arise so that they can be acted upon. More comprehensive and timelier data enables more precise control of processes. With sufficient integrated monitoring, the need for preventative maintenance is greatly reduced or eliminated entirely as processes do not have to be stopped for periodic manual inspection. Defects in outputs can also be eliminated as processes that are failing are detected before tolerances are exceeded. The ability to tightly control processes means that product tolerances can be reduced in tandem with reductions in process variability, resulting in more predictable process outputs. Smaller buffers and fewer redundancies mean that the same output can be achieved with less resource input. In all cases, waste is reduced and efficiency is increased.

4.3.2. Feedback systems

Having collected the data, the next step is to use it to maintain or improve the processes that generated that data. The significance of effective feedback is that it is continuous and dependent on the circumstances, meaning that a dynamic environment of constantly shifting variables will not cause it to behave dysfunctionally (Hodge 2006: 159,

97 Hawken, et al. 1999: 282-84). Feedback mechanisms efficiently interpret the collected data into meaningful knowledge that can be applied to improve the system element it serves. Complementing the decentralised, networked modular system model, it follows that feedback mechanisms should also function as autonomously and in as decentralised a manner as possible, with the minimal external oversight necessary to maintain system coherence. This is especially important as the scope of feedback mechanisms are naturally limited by the speed and proficiency with which the collected data can be interpreted into actionable knowledge. The localisation of feedback mechanisms means that communication paths are short and that the potential for bottlenecks are few (Hawken, et al. 1999: 66-68).

Feedback is not something that is inherently incorporated into mass-production’s subdivision of labour. The subdivision of a complex task into a sequence of actions, in itself, has no mechanism for regulating those actions. This necessitates the management hierarchy whose job it is to monitor the processes and to issue instructions whenever they are necessary, and which exists in a separate structure from the processes that perform the actual tasks. In a system that incorporates pervasive knowledge, the goals are to integrate these regulating functions into the processes so that only the minimum of separate management is necessary, and to automate these regulating functions wherever this improves its performance. This is, of course, the primary purpose of lean management as first-instance troubleshooting and routine management tasks are handled within work cells.

This localised feedback and management is possible

because each work cell collects its own data and is given sufficient authority to act on that information.

At the level of the work cell, it is possible and desirable to

continuously monitor each of the equipment and processes within the cell. Indeed, where processes are mechanised and automated the human workers are employed solely to manage the machines, handling the primarily cognitive tasks of interpreting information and solving problems.

The other three fields equally place importance on effective feedback mechanisms as a means for directing system behaviour.

The primary concern in environmental

economics is that the market system is not sending appropriate incentives to individuals and organisations, the result of which is that the feedback mechanism is producing

98 dysfunctional behaviour. The problem of externalities is that certain categories of data, primarily environmental and social costs and benefits, are not adequately collected and effectively translated into a form of knowledge that is efficiently assimilated into economic decision-making, namely monetary costs that impact on the bottom line of businesses.

This dysfunctional feedback is particularly troublesome because it is

already pervasive and massively decentralised. Every individual in the industrialised world routinely conducts monetary transactions driven by individual motivations, following the accepted rules that govern such transactions. If it were not for the persistent externalities, the free economy would be the model for how to deploy a feedback system: the costs involved in the provision of any commodity, product, or service is automatically translated into a commonly accepted numerical value that provides every individual with sufficient information to independently determine what action to take. It is this proficiency that makes the monetary economy indispensable to humanity, despite its flaws.

Industrial ecology also deals with feeding back environmental costs into the industrial system, in its case by rejecting “waste” as the blanket term for anything that is unwanted by any particular production or consumption process. As long as residual materials are simply considered rubbish, the costs of dealing with them can easily be considered simply to be the cost of transporting them to landfills.

The crucial

information that needs to be fed back to industry, the environmental costs of dumping these residues, remains a largely un-captured externality.

By treating residues as

products, the costs of recycling these materials or post-processing them so that they will be environmentally benign become unavoidable factors for consideration. The problem of sprawl, addressed by sustainable urbanism, is also a matter of dysfunctional feedback, as the negative symptoms of sprawl, low quality urban environments that exploit undervalued undeveloped land on the urban periphery, simultaneously become incentives for more sprawl, to profit from building new low quality development on underpriced land on the urban periphery. In order to rectify the system so that it encourages investment in high quality, low environmental impact urban developments, it is proposed that the costs of green-field development be amended to reflect the loss of environmental value, while brown-field regeneration be subsidised to reflect the increase in the social value of the renewed urban fabric. System dysfunction is repaired

99 by ensuring that the feedback mechanisms provide the correct information to decisionmakers.

4.3.3. Embedded utility and information

In contrast to the “active” knowledge represented by integrated data collection and feedback mechanisms, embedded utility and information may be considered passive knowledge.

Where active knowledge is the actual collection and processing of

information, passive knowledge deals with preserving the value that is invested into creating materials and products.

As materials are processed, energy is expended,

entropy is reduced, embedded utility is increased, and therefore the value of the material is increased. For example, considering Adam Smith’s pin makers once more, the steel wire that is used as the input is smelted and formed from iron ore, expending fuel and producing residues in the process. The steel wire has greater utility than the iron ore, and this increase in value is offset by the costs of its production in the degradation of some of the inputs into lower value residues. As the wire is processed into pins, at every stage of the process more resources are expended to add value to the metal, until it becomes the end product, the pins. Up until the consumer phase, the embedded value of the pins is generally well managed, as this obviously impacts on the profit margins of the industrialist; care is taken to ensure the pins remain a sellable product. However, gaps in the management emerge in the post-consumer stage, where industrial ecology demands that the pins should be reused or recycled. Most importantly, recyclers need to be able to identify materials in order to properly process them. In the case of the pins, while it is likely that they would be made of plain carbon steel, it may be possible that some pins may be made from stainless steel, or some other steel alloy, and this might affect the recycling process.

Efforts to recycle materials may be thwarted if the

procedures for identifying unknown materials prove to be prohibitively expensive or time-consuming, and in such circumstances the most appropriate thing would be for the manufacturer, who has full knowledge of what the item is made of, to place this information on the product so that it allows the recycler to identify and process it easily. This is what is meant by retaining value through embedding knowledge

100 In the case of steel pins, this problem is relatively minor, as iron is abundant, easily recyclable, and pins constitute a tiny fraction of the total amount of steel utilised by humanity. However, for more complex products involving up to dozens of materials combined in complex arrangements or for materials where identification is difficult or where misidentification is costly, the simple act of labelling materials by the manufacturer can drastically reduce costs for the recycler. This may be the only way to make recycling a viable and attractive alternative to exploiting virgin resources. An example of this is the case of plastics, a name given to a wide range of synthetic polymer materials. While these materials may be perceived by the end user as similar in appearance and feel, their source materials, manufacturing processes, uses, and recycling procedures are all different and largely incompatible between different plastic types. The combination of perceptual similarity and recycling incompatibility frustrates recycling efforts unless a labelling system is devised whereby the different types of plastics can be cost-effectively identified. A labelling system has, indeed, been devised, and the resin identification code symbol consisting of three arrows cycling clockwise to form a rounded triangle enclosing a number can be seen on many plastic products. However, at present, the nature and variety of plastic wastes, combined with the practice of mingling wastes in rubbish bins, means that plastics recycling still requires a significant amount of human labour to identify and re-separate the mingled wastes into recyclable residue streams.

The labelling, by itself, has made plastics recycling

possible, though not yet decisively profitable.

Beyond the recycling of basic materials, manufactured components, likewise, embody within them the value of their manufacture and this value can be retained by embedding the knowledge of its manufacture into the item itself.

Obviously, disassembly,

recycling and remanufacturing carry with them processing costs in terms of time, energy and material input.

To minimise these costs, it is necessary to design

components that can be easily repaired and reused, thus preserving the value of the component. The point here is that cost and value, though related, are not equal. Cost is the amount of resources that has been expended in an item’s manufacture, while value is the item’s potential for useful utilisation. Where the utilisation of an item is dependent on a person’s knowing what the item is and how to use it, access to this knowledge becomes the key to unlocking embedded value, and the unavailability of this knowledge results in unnecessary waste.

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4.3.4. Automated management

Pervasive knowledge has two complementary outcomes. Firstly, the amount, accuracy and timeliness of information collection and processing are greatly increased by harnessing information technologies, allowing the capturing of externalities and more precise control of processes. Secondly, the regulation and management of processes are automated through system feedback, reducing or eliminating the need for human input into routine decision-making. This automation of management is analogous to the mechanisation of labour. Just as more precise and efficient machine labour has replaced human labour in the performance of repetitive manual tasks, with human labour taking on a machine-operator or problem-solver role, any management task that can be performed as a predictable routine can also be automated and made more efficient (Graedel, et al. 1995: 335, Hawken, et al. 1999: 66-68).

The successful automation of management is an essential goal of systemic sustainability, as it represents a positive engagement with complexity and seeks to reduce the occurrence and impact of externalities. Externalities are essentially system influences that are hitherto too costly to manage. The contributions from pervasive knowledge and automated management to the capturing of externalities are to increase the scope and to reduce the costs of management. In environmental economics, for example, the initial response to the challenge of externalities is the development of lifecycle assessment methodologies in an attempt to consider comprehensively the totality of the implications of any particular industrial process. As discussed previously, it was found that this process was too wide in scope and too labour intensive in its planning, data collection and data interpretation, and far too costly to conduct in any detail. Compounding the problem is the lack of standardisation in that each LCA was, due to the necessity of simplification, custom-built for a specific purpose and cannot be easily adapted to other purposes.

This is analogous to production before the systematic

application of division of labour, when products were individually crafted by skilled artisans using general-purpose tools, and the scope of production and consumption was limited due to the limited application of economies of specialisation.

Just as

102 productivity could increase when tasks were divided into smaller steps to be assigned to specialised workers, so does environmental economics suggest that the task of capturing externalities would be better achieved if it were decentralised and embedded within the activities that generated them in the first place. By utilising such tools as environmental taxes and subsidies, or the selling and purchasing of environmental services, and transitioning from a goods economy to a services economy, externalities are captured into the existing economic framework via normal day-to-day transactions.

This

removes the necessity of actively conducting LCAs in every instance and situation. The capturing of externalities in the most routine, everyday tasks is automatically incorporated into pricing mechanisms, and comprehensive LCAs would only be necessary at the oversight level that monitors the direction of the overall system and adjusts, for example, the guiding taxes and subsidies as necessary.

Likewise, industrial ecology expects that the development of a mature industrial ecosystem will result not from any sort of centrally managed planning and design, but through the development of a residues marketplace where individuals and organisations are motivated by economic incentives/disincentives to manage their residues responsibly.

Establishing a fluid market model, instead of a more rigid planned

industrial network, means that the mechanisms for the distribution of residues will be designed to automatically monitor the market in order to find the optimum buyers and sellers, instead of simply scheduling transactions between predetermined partners. When the conditions in the ecosystem changes, the mechanisms in the market model are better able to automatically adapt themselves without requiring a system redesign, as would be the case if the ecosystem was designed and planned in a rigid manner. For lean management, the automation of management needs little elaboration. The semiautonomous cell, by definition, is a work unit that is essentially self-managed and requires only minimal oversight to function properly. In all cases, the goal is to create self-optimising systems that are not costly to manage, so that more management resources can be committed to internalising externalities and system improvements.

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5. Sustainable patterns manifest

Having identified the concepts that we expect will lead us away from systemic resource depletion and environmental degradation towards a human system that will be sustainable and viable in the long term, there is still the problem of how they may be applied successfully. While this thesis cannot be a crystal ball with which to see into the future, there are nevertheless some recurring motifs throughout the discussion that can be expected manifest themselves should the concepts be followed through into actions. It must be realised that these expected outcomes will be the expected results of the application of systemically sustainable thinking with its themes of achieving a whole-system perspective, organising through a networked modularity, and managing through pervasive knowledge. Any attempt to design a society to have the appearance of the outcomes, but which is not founded upon a systemically sustainable approach, will likely be counterproductive. Nevertheless, such as it is, knowing the expected outcomes may serve to clarify the purpose of each aspect of systemic sustainably.

The first persistent concern is the conflict between the economies and the diseconomies of specialisation. The features that facilitate specialisation and the division of labour are fairly well understood, even in Adam Smith’s time, to be high density and ease of transactions (Smith 1979: 121-23, 507-08). Smith noted that the division of labour develops more in large cities because the high density of people and economic activity generates greater demand for any particular trade or skill, and therefore an individual is able to make a living from a more specialised set of skills. Also noted was the tendency for cities to form at natural harbours and along rivers, as shipping was the most costeffective way, at the time, to transport goods over long distances. The availability of shipping lowered transaction costs and effectively enlarged the market accessible to the city. Certainly, Smith’s observations continue to hold true, as large cities remain the economic powerhouses that they have always been, and significant port cities continue to profit from their status as trade hubs. In today’s world, of course, infrastructure that facilitate transactions, at the city scale, also include railways, roads and highways, airports, telecommunication networks, and other networks, as well as seaports and

104 waterways. The same patterns of high density and interconnectivity are also evident in other areas and at other scales. For example, industrial ecology aims towards clusters of interdependent industrial processes, and sustainable urbanism advocates medium- to high-density mixed-use neighbourhoods with well interconnected street patterns. Sustainable urbanism is particularly critical of low-density sprawling development as both resource inefficient and incapable of generating economic opportunities and civic vitality.

The caveat here is that density is not pursued for the sake of density, but as a means for enabling specialisation and reducing transaction costs. To achieve this, density must be accompanied by diversity and mutability.

A key feature of Smith’s pin-making

workshop is that each worker performs a different task, and that it is the combination of all the different tasks that produces the useful product. Obviously it would be pointless for a factory full of workers to be making only pinheads without anyone making the rest of the pin. At the scale of an industrial zone, the goal of utilising all residues and producing no net waste necessarily requires the co-location of complementary but dissimilar industries, each using the unwanted by-products of the others. A healthy industrial ecosystem, like a thriving natural ecosystem, will contain myriad specialised metabolisms filling all of the ecological niches with the result that virtually no potential resource is left unutilised. Likewise, at an urban scale, daily travel and transactions necessarily occur between different land uses. Both economies and diseconomies of specialisation are at work, as the clustering of similar land uses enables more efficient provision of shared services, but also increases the distances, and therefore the transaction costs, between dissimilar land uses. Economic and cultural activity is only possible where different specialisations are able to trade and exchange materials and ideas, and diversity in urban development provides for better opportunities for such exchanges.

Features that mitigate the shortcomings of the division of labour are less obvious, but they would be mechanisms to avoid systemic isolation and to promote useful communication and transactions.

Lean management recommends that work cells

should be designed in a “U” shape, which combines the need for a clear, simple flow of materials with the need to encourage cell team collaboration and cooperation (Black

105 2000: 178, Feld 2001: 87-88). To elaborate, the workstations of the cell are arranged in linear sequence optimised for the particular process that the cell performs the most often, and then the line is folded into the “U” shape with the workers on the inside of the “U” facing outwards. All of the advantages of the traditional mass-production line are still present, while non-linear processing is made easier because all the workstations are brought physically closer together. In addition, each of the workers can easily keep track of all of the activity within the cell, as there are direct lines of sight to the entire cell from each of the workstations, and any necessary discussion or meeting can be quickly and easily conducted at the centre of the “U” simply by having everyone turn around to face the centre. To generalise, the work cell arrangement places a number of peripheral

spaces

of

specialisation

around

a

central

space

of

transaction/communication/collaboration, the movement between which are fluid and unobstructed. In addition, two of the specialisation spaces specialise in interfacing with other work cells in the larger system, one each for inputs and outputs.

This type of arrangement is not particularly novel or innovative and, if one cares to look, it can be found operating in many different situations and at different scales. At the scale of an individual, we may consider the example of a number of people sitting around a table, where the table serves as the platform over which dialogue and exchanges may take place. At the scale of a building, there will typically be distinctions made between, on the one hand, offices or rooms as spaces of separation and, on the other, meeting rooms or dining areas or other forms of gathering spaces. At the larger scale of the neighbourhood or town, we can expect to see a commercial and cultural centre of some sort, either a town square or mall or main street or some other form, surrounded by offices and residences. At the city or metropolis scale, if we make some gross simplifications, we find that every city will have a primary commercial centre, the space of transactions and exchanges, surrounded by industrial and residential areas where products are produced and consumed. It is easy enough to identify this pattern where it exists, but more important is the ability to identify where it is absent or where it is dysfunctional. As a space of transactions, how easy is it to trade and exchange materials, services and ideas?

How great is the variety of products, skills and

information available there? Would a greater variety better serve the individuals and organisations that utilise that space? As spaces of specialisation, do they have sufficient

106 focus and buffering from unwelcome interferences? Are they well connected to their suppliers and customers? Are the transaction costs as low as practicable?

Keeping in mind the need for the decentralisation and consolidation of authority and decision-making to the groups and entities that are best able to manage them, the spaces of transactions must effectively facilitate communication and collaboration.

The

fractal-like nesting of modules within modules within modules, if properly implemented, provides for different levels of capabilities to meet different scales of management required.

The outcome, as previously discussed, is two-fold: upper

management is no longer burdened with the responsibility of having to micromanage concerns that are too small and specific to be efficiently handled at that scale and level; at lower levels, individuals or management entities gain greater control of those aspects of the system that are most immediately relevant to them and of which they are best able to handle.

The spaces of communication and collaboration, where they function

effectively, are the mechanisms that enable this more streamlined redistribution of responsibility and power. These spaces may be physical, for example in the form of meeting rooms, halls, courtyards, fora, or parliamentary chambers, or they may be virtual and involve the exchange of information without necessitating physical proximity. The activities conducted within them may be formal or informal, planned or impromptu as the circumstances require.

Whatever goes on within them, these

mechanisms must be easily accessible, available in forms and scales that suit the transactions that occur within them, and they must not intrude upon the spaces of specialisation. The absence or dysfunction of these mechanisms may be recognised by a distinct lack of communication and collaboration between the specialisations, and a high degree of opacity and obscurity that each specialisation experiences with regards to the other specialisations and to any information that should be of concern.

Such

dysfunctions are the conditions that create and perpetuate externalities.

Also important to the internalisation of externalities is the visibility of inputs and outputs.

Most obviously, process outputs that manage to escape notice and be

unaccounted for are externalities, and unnoticed inputs are similarly problematic in that the process cannot function as intended if inputs are not understood and controlled. As such, in a sustainable society, the inputs and outputs to any process would always

107 remain visible and accounted for, and this includes intangible flows, such as knowledge, as well as tangible ones. While this is relatively straightforward as a concept, it is not necessarily something that can be expected to happen naturally. For example, people generally do not wish to have to carefully consider what happens to the sewage they generate, and they would rather have it disappear as quickly as possible so that they will not have to think about it. Certainly we know from history that many capitalists and industrialists did not hesitate to discharge all manner of chemicals and wastes into whatever waterway or dump as was convenient to them until such government-imposed oversight and penalties were in place to make it economically more advantageous for them to deal with their wastes more carefully. It is human nature to exploit externalities where there are no obvious negative consequences. In a sustainable society one would always know exactly where the trash is, though it runs against the human instinct to want to get rid of it and not have to think about it. Certainly, this is the only way that industrial ecology will work; processes upstream in the industrial ecosystem will have to present their outputs in a manner that makes them useable by processes downstream. The generation of residues and refuse will always be inevitable, and those who think that sustainability is about “clean” and “green” will have to understand that it is only so if the dirty work of residues management is done properly.

Another counter-intuitive outcome that can be expected is that a sustainable society will not seem overtly “green” to the majority of the people in it, even those who do not have to deal with residues. If we consider the urbanism aspect, sprawling development provides substantially more private green space per citizen and provides substantial distancing between most citizens and dense urban and industrial developments. Of course, the problem with this is that this private green space is acquired at the expense of agricultural lands and natural habitats, while transporting people across, providing infrastructure for, and distributing goods to such sprawling developments consumes substantial amounts of energy and produces much pollution. In contrast, if we are to take the idea of density seriously, it would not be surprising to discover that standing in the middle of a dense urban environment would not in any way feel “green”. Yet it is the concentration of human development, not spreading it thinly across vast areas of the globe, that would ensure the preservation of natural ecosystems through the exclusion of human impact and exploitation.

108

6. Conclusion

Ultimately, what is sustainability? To be sustainable is to meet the needs of today without compromising the potential for future generations to provide for their own wellbeing and prosperity. Some aspects of humanity are amenable to this goal, while other aspects are not. For example, humanity consumes fresh water and timber and foodstuffs, all of which are potentially renewable at a sustainable rate if properly managed, and the residues of which can be assimilated by natural processes if also properly managed. On the other hand, humanity also consumes metals and fossil fuels and other non-renewables, for which there are no natural processes for renewing at a rate comparable to consumption, and the residues for which often cannot be assimilated by natural processes. No matter how efficient we make our industry, and no matter how committed we are to conservation, it is likely that humanity will not be sustainable without a radical reconsideration of industrialism.

The human industrial system, such as it is, is inherently unsustainable. At the beginning of the industrial revolution, the limiting factor in human production was labour productivity.

The overcoming of this limitation through the application of

specialisation and machine labour resulted in a period of increasing industrial activity led by continuing improvements in labour productivity. In the present situation, the limiting factor is no longer labour productivity but resource productivity and environmental degradation.

The industrialist assumptions of limited labour and

continued resource availability, assumptions that exist at the very foundations of industrialism, are becoming increasingly invalid precisely because industrialism has been so successful in overcoming those limitations. When a system is entirely premised on material throughput, as our contemporary industrialism is, improving efficiency and reducing waste will occur only in the context of acquiring greater net material throughput, not for the purpose of reducing resource depletion per se.

Likewise,

conservation of the natural environment will only make sense if it is for the purpose of preserving resource availability and preserving ecosystem functions that support industrialism.

While efficiency and conservation are important, the system will

109 continue to be premised on resource depletion and environmental degradation unless there is a deeper re-evaluation of industrialism’s basic assumptions. This re-evaluation is the goal of the four fields of sustainability study discussed in this thesis: environmental economics, industrial ecology, sustainable urbanism, and lean management.

The four fields approach the sustainability problem from different directions.

In

economics, industrialism’s tendency to rely on and exploit externalities is identified as the main reason for the continuation of unsustainable self-destructive behaviour. By adopting full-cost accounting practices, by removing subsidies for resource depletion and disincentives against investing for the long-term, and by taking value away from material throughput and placing it in service provision, environmental economics advocates literally changing the rules to remove our systemic reliance on externalities. In industry, the extraction-to-disposal model of production and consumption on which our entire industrialism is based is understood to be an unsophisticated and inherently unsustainable model. As human industry expands to incorporate and influence the entire globe, industrial ecology recognises that it is necessary to adopt a closed-cycle model of material flows as there simply is no infinite supply of materials to extract or infinite sink for the disposal of wastes. In urbanism, it is recognised that sprawling, low-density, automobile-dependent development constitutes unsustainable massconsumption at a landscape scale and that it has the effect of diluting the very economies of concentration that allow cities to be successful. Each of the motivations for sprawl, while understandable when considered alone in isolation from each other, simply do not add up when considered in combination, and therefore sustainable urbanism calls for a holistic approach to settlement planning that seriously take into account economic, environmental and cultural concerns at every step and scale. In management, the conventional model of extreme division of labour and rigid hierarchal management creates an inflexible and unresponsive system with disincentives for quickly identifying and fixing mistakes and improving processes. To overcome this rigidity, lean management provides the strategy of the decentralisation and automation of routine management tasks by creating autonomous work cells that are trained and equipped with the skills and tools they need to schedule their own work and solve basic problems.

By doing so, the need for micromanagement is eliminated and upper-

management can devote their resources to longer term and larger scale planning.

110 On the surface, the four fields are disparate, seemingly tackling a huge problem from different directions in an uncoordinated manner. However, underlying all of the ideas is an emerging set of ideas and assumptions that implicitly critique and counter some of the assumptions that underpinned the rise of industrialism.

Against conventional

industrialism’s overwhelming focus on labour productivity, the four fields call for a whole-system approach that is able to take into account of all forms of capital, all affected individuals and groups, and all stages of the production/consumption process. Against the inflexible management hierarchy that exist separately from processes, the four fields call for a model of decentralised, networked modular management that is embedded within processes as much as possible. Against the strategy of reductionism and analysis in the face of overwhelming complexity, the four fields take advantage of advances in information technology to enable real-time continuous monitoring of all relevant variables and automated feedback to processes. Clearly, these approaches go well beyond simple efficiency and conservation concerns in that they seek to transform the very nature of industrialism.

No longer unquestioningly pursuing labour

productivity and accepting increasing material throughput as the norm, the new approaches demand flexible, holistic solutions.

The outcome, should this new thinking be successfully pursued, will be a redesigned industrial system that attains the benefits if industrialism while avoiding its dangerous shortcomings. The key to specialisation and the division of labour are density, diversity and streamlined transactions, and these features will be refocused and pursued. However, this will be done with the understanding that externalities and professional isolation must be avoided, and therefore mechanisms for measuring and making residues visible will be highly important, as will effective spaces and mechanisms that make specialisations accessible to each other and enable useful communication between them. Finally, systems and processes will be set up so that decision making authority and responsibility will be decentralised wherever this is possible, useful, and results in a more responsive system, with care taken to not place such power where it would be detrimental to do so.

When discussing such underlying trends and assumptions of different variations of human activity and development, it is impossible to foresee entirely what impacts these

111 trends will have on the future direction of humanity. However, this much is clear: human industry is currently operating in an unsustainable mode, inexorably depleting the resources and degrading the environment on which it depends for its very survival. When labour productivity was the major impediment to human development at the beginning of the industrial revolution, the solution was not for people to simply work harder, but rather it was a radical change in the way labour was conceptualised and deployed. Likewise, in our time, the solution will not be to simply use fewer resources and reduce environmental disruption, but rather it will be a radical change in the way resources and interactions with the environment are conceived and managed. This thesis has identified some of the underlying assumptions and some emerging strategies that can be expected to lead to this change, and it is hoped that they will enable the continuation of human development within the context of and successfully negotiating environmental limitations.

112

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