Economic Environmentalism – Cooperative Cost and Waste Reduction

Feb. 2, 2011 - PRLog -- It’s a given that innovative and cost-effective environmental policy are needed in both private and public domains, however, much like the DeLorean, the shiniest solution is often more expensive and less effective.

More often than not, public policy imposes a cost on consumption to discourage negative consumer behaviour (see emissions trading, carbon tax) rather than encouraging efficiency, fundamentally countering productivity. What we need are positive instruments to correct market failure without affecting productivity.

In India, where all recycling is undertaken by the informal sector, a piece of plastic can increase 700% in value along the recycling chain (ecologycenter.org), before it is even reprocessed. Taking this into consideration, there is tremendous opportunity for firms to optimise their resource management by disposing waste materials at a value above zero.
What is residual waste to one user may be a strategic commodity to another.
Collaborative resource management tools such as Wastivity.com, Towards Zero Waste, NISP and WRAP have been developed to enable those who would otherwise have procured virgin resources at market prices to purchase waste from each other at well below virgin material prices. The leanest way to simultaneously reduce costs, increase yield and efficiency and minimize environmental impact is to encourage the transfer of waste from one production system into another as a production input.
 
An increased utilisation of used materials will subsidize consumption of virgin materials. Production costs will reduce and, consequently, productivity will increase.

The National Industrial Symbiosis Programme (NISP) has had tremendous success in the UK. They have in excess of 12,000 members of all sizes including industry leaders Veolia, Shell, Diageo, Bombardier and Michelin. Verified outputs to 2010 include £156M of cost savings, £176M of new business, 7M tonnes of landfill diversion and almost 10M tonnes of virgin material savings.  Wastivity was recently launched to assist Australian business leaders capture similar results.

If the environment is insufficient to influence strategic decision making, supply chain costs in disposal, storage, cost of inefficient use (scrapped material) and opportunity cost (redeployment value) can all be reduced by developing supply chain networks.
There is one major hurdle in the uptake of resource collaboration and industrial ecology networks: they require significant scale to be effective. Through industrious positive government policy and large scale company adoption, however, ‘economic environmentalism’ could develop into the next major manufacturing practice.

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Wastivity.com creates a new vertical link in the supply chain, presenting an opportunity for businesses to not only reduce total system waste-to-input ratio, but also realize financial value for waste. Wastivity acts as an online marketplace where producers with no further use for perceived ‘waste’ are able to locate buyers who can further utilize it as a production input or treat it to re-distribute as another product.