Academic journal article Journal of Business Administration and Policy Analysis

Eco-Accounting: How Industrial Ecology Can Pay Double Dividendes for Business

Academic journal article Journal of Business Administration and Policy Analysis

Eco-Accounting: How Industrial Ecology Can Pay Double Dividendes for Business

Article excerpt


Human population growth and consumption now place unprecedented demands on the environment. Faced with these challenges, the Brundtland Commission recognised that the only way we would be able to continue to meet human needs was "by steadily reducing the energy and resource content of future economic growth" (WCED 1987: 213). In particular, Brundtland recommended that industrial operations should be encouraged "that are more efficient in terms of resource use, that generate less pollution and waste, that are based on the use of renewable rather than non-renewable resources, and that minimise irreversible adverse impacts on human health and the environment" (WCED 1987: 219).

Population and economic growth, and now more than ever, the lifestyles and consumption habits of more wealthy industrialised nations, draw massive amounts of energy and materials into the industrial system (Wernick et al. 1996). Studies show in North America that only seven percent of industrial throughput winds up as product and only 1.4 percent is still product after six months (Friend 1996). The waste generated per capita is now more than double that of the preceding generation (Davies & Mazurek 1997). Urban and industrial wastes are rapidly becoming potentially richer and more reliable material sources than naturally occurring ores and harvested fibres.

In nature, waste is the key to renewal. If we want to meet human needs and at the same time minimise the damage we do to the environment, then we will have to accept two challenges. We must steadily reduce the energy and material content of industrial production. At the same time, we must also increase our reliance on the use of industrial and post-consumer waste as the primary feedstock of future economic growth.

Canada's economy is characterised by a reliance on energy and natural resources. Because of the ready availability of energy, water, land and mineral resources, Canada is competitive in industrial sectors using these resources intensively. These industrial sectors (e.g., harvesting, extraction, food production, primary processing, energy generation and transportation) are generally more stressful to the environment than secondary manufacturing or service industries. The ratio of waste, contaminants, or resource recovery to useable product is very poor. Disposal, dispersion and dilution (end-of-pipe and end-of-stack solutions) are still the pollution and waste management approaches commonly in use. As long as Canada has a large backyard and under-prices its resources, there will not be much incentive for corporations to economise on the use of inputs or to minimise waste.


In the 19th and early 20th centuries, we managed industry as if we had unlimited resources and could produce unlimited waste without doing any harm. The traditional once-through model of industrial production depends on cheap abundant resources and waste disposal. Most industrial processes are fossil-fuelled, make intensive use of energy and materials, involve high temperature and pressures, and contain multiple steps where harmful substances can be discharged to the environment. Products are mass-produced, have limited useful lives, are not easily repaired and are cheaply discarded. Producers' responsibility for their products ended at the plant gate.

Since the 1970's, governments have forced industry to respond to growing public concern one pollutant at a time by imposing "command and control" regulations. Command and control regulations specify the allowable rates of discharge based on the use of a particular technology. To comply with these regulations, most companies have installed add-on pollution control devices. By definition these control devices cannot reduce risks to zero and may produce waste requiring safe disposal. As the stringency of control increases, the use of pollution control devices is sharply limited by rising costs. …

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