Eco-efficiency

Last updated

Eco-efficiency refers to the delivery of goods and services to meet human needs and improve quality of life while progressively reducing their environmental impacts of goods and resource intensity during their life-cycle.

Contents

Terminology

As countries and regions around the world began to develop, it slowly became evident that industrialization and economic growth come hand in hand with environmental degradation. [1] "Eco-efficiency" has been proposed as one of the main tools to promote a transformation from unsustainable development to one of sustainable development. [2] It is based on the concept of creating more goods and services while using fewer resources and creating less waste and pollution. "It is measured as the ratio between the (added) value of what has been produced (e.g. GDP) and the (added) environment impacts of the product or service (e.g. SO2 emissions)." [2] The term was coined by the World Business Council for Sustainable Development (WBCSD) in its 1992 publication "Changing Course". At the 1992 Earth Summit, eco-efficiency was endorsed as a new business concept and means for companies to implement Agenda 21 in the private sector. [3] The term has now become synonymous with a management philosophy geared towards sustainability, combining ecological and economic efficiency. [3]

History

Although eco-efficiency is a rather new method, the idea is not. In the early 1970s Paul R. Ehrlich and John Holdren developed the lettering formula I = PAT to describe the impact of human activity on the environment. [4] Furthermore, the concept of eco-efficiency was first described by McIntyre and Thornton in 1978, [5] but it wasn't until 1992, when the term was formally coined and widely publicized by Stephan Schmidheiny in Changing Course. [4] Schmidheiny set out "to change the perception of industry as being part of the problem of environmental degradation to the reality of its becoming part - a key part - of the solution for sustainability and global development". [6] The major drivers in the early phase of eco-efficiency's development were the "forward-looking managers and thinkers in 3M and Dow". [6] It was their involvement which catapulted eco-efficiency into development. The results of the WBCSD's work creating the "linkage between environmental performance and the bottom line was published in 1997 in its report Environmental Performance and Shareholder Value". [6]

Methods

According to the WBCSD definition, eco-efficiency is achieved through the delivery of "competitively priced goods and services that satisfy human needs and bring quality of life while progressively reducing environmental impacts of goods and resource intensity throughout the entire life-cycle to a level at least in line with the Earth's estimated carrying capacity". [6] It works by implementing 4 main types of ratios.

"The first two are environmental productivity and its inverse, environmental intensity of production, referring to the realm of production. The second pair, environmental improvement cost and its inverse, environmental cost-effectiveness, are defined from an environmental improvements measures point-of-view." [1]

The ratios may be applied to any unit comprising economic activities because such activities always relate to cost and value, "and having some physical substrate, always influence the environment." [1] [6] Furthermore, there are two different levels upon which to orchestrate the ratios: micro and macro. There are three different methods to determine eco-efficiency at the micro-level. First, incremental eco-efficiency, which "specifies the effects of the total value of a product system or sector and its total concomitant environmental effects." [1] Second, an analysis method nicknamed win-win, which "gives a comparison between a historical reference situation and potentially new situations based on the use of new technologies." [1] [7] The win-win micro-method is limited because it cannot give a concrete answer on the question of whether it improves overall environmental performance. And the third is difference eco-efficiency, which is similar to the win-win variant, but removes all irrelevant alternatives to heighten potential for optimal technologies while comparing two alternatives. [1] Now the macro-level is much less defined and has shown less accurate results. However, "the ultimate aim of eco-efficiency analysis is to help move micro-level decision making into macro-level optimality." [1] [3] [6] The main goal in years to come is to create headline indicators to carry out macro-level analysis at a country/world scale. [3] [8]

There are two life-cycle assessment (LCA)–based calculation systems on eco-efficiency: the analysis method of BASF, and the method of the eco-costs value ratio of the Delft University of Technology.

Uses

The reduction in ecological impacts translates into an increase in resource productivity, which in turn can create a competitive advantage. [8] According to the WBCSD, critical aspects of eco-efficiency are: [6] [9] [10]

Strategies that have been linked to eco-efficiency include "Factor 4" and "Factor 10", which call for specific reductions in resource use, "natural capitalism", which incorporates eco-efficiency as part of a broader strategy, and the "cradle-to-cradle" movement, which claims to go beyond eco-efficiency in abolishing the very idea of waste. According to Boulanger, [11] all versions of eco-efficiency share four key characteristics:

The view that improvements in eco-efficiency are sufficient for achieving sustainability has been challenged by Huesemann and Huesemann, [12] who demonstrate using extensive historical evidence that increases in technological efficiency have not reduced overall resource use and pollution. Moreover, with "cradle-to-cradle", growth is conducive to sustainability per se. This broader concept is called Sustainable Production and Consumption (SPC). "This concept involves changes in production and consumption patterns that lead to sustainable use of natural resources;" [8] business has taken a key role in accelerating the use of this concept because businesses both consume and produce. Eco-efficiency is routinely a concept used because it combines performance along two of the three axes of sustainable development, [4] making it easier for academics and leading thinkers to tease out the associated social issues. [6]

Examples

Furthermore, eco-efficiency can adapt and flex to be fit different sizes of companies, while also maintaining relevance with the larger scale of government and national policies. [6] For example, larger national players such as the Organisation for Economic Co-operation and Development (OECD 2002), European Commission (EU 2005), European Environment Agency (EEA) and the National Round Table on the Environment and the Economy (NRTEE) have all recognized that eco-efficiency is a practical approach that businesses should adopt in setting and achieving their environmental performance objectives. [2] [6] [8] [13] [14] It has been proven to heighten market values for firms, [7] [15] serve as an effective management tool for governments, benefit civil society, and increase quality of life. "It does this by changing industrial processes, creating new products and changing and influencing markets with new ideas and with new rules." [6] More people aim to get more value for their money in the market, while also enjoying a better environment.

Eco-efficiency is also implemented in more non-traditional ways, such as the integration of environmental criteria into the credit approval process; looking at "eco-integrated economic risks of a customer". [16] Besides, it plays a growing role where "eco-efficient choices are always preferred," [4] especially in service sectors such as tourism (see ecotourism). [6]

See also

Related Research Articles

<i>I = PAT</i> Equates human impact on the environment

I = (PAT) is the mathematical notation of a formula put forward to describe the impact of human activity on the environment.

<span class="mw-page-title-main">Ecological economics</span> Interdependence of human economies and natural ecosystems

Ecological economics, bioeconomics, ecolonomy, eco-economics, or ecol-econ is both a transdisciplinary and an interdisciplinary field of academic research addressing the interdependence and coevolution of human economies and natural ecosystems, both intertemporally and spatially. By treating the economy as a subsystem of Earth's larger ecosystem, and by emphasizing the preservation of natural capital, the field of ecological economics is differentiated from environmental economics, which is the mainstream economic analysis of the environment. One survey of German economists found that ecological and environmental economics are different schools of economic thought, with ecological economists emphasizing strong sustainability and rejecting the proposition that physical (human-made) capital can substitute for natural capital.

<span class="mw-page-title-main">Triple bottom line</span> Accounting framework

The triple bottom line is an accounting framework with three parts: social, environmental and economic. Some organizations have adopted the TBL framework to evaluate their performance in a broader perspective to create greater business value. Business writer John Elkington claims to have coined the phrase in 1994.

<span class="mw-page-title-main">World Business Council for Sustainable Development</span>

The World Business Council for Sustainable Development (WBCSD) is a CEO-led organization of over 225 international companies. The council is also connected to 60 national and regional business councils and partner organizations.

A green economy is an economy that aims at reducing environmental risks and ecological scarcities, and that aims for sustainable development without degrading the environment. It is closely related with ecological economics, but has a more politically applied focus. The 2011 UNEP Green Economy Report argues "that to be green, an economy must not only be efficient, but also fair. Fairness implies recognizing global and country level equity dimensions, particularly in assuring a Just Transition to an economy that is low-carbon, resource efficient, and socially inclusive."

A sustainable business, or a green business, is an enterprise that has a minimal negative impact or potentially a positive effect on the global or local environment, community, society, or economy—a business that strives to meet the triple bottom line. They cluster under different groupings and the whole is sometimes referred to as "green capitalism". Often, sustainable businesses have progressive environmental and human rights policies. In general, a business is described as green if it matches the following four criteria:

  1. It incorporates principles of sustainability into each of its business decisions.
  2. It supplies environmentally friendly products or services that replace demand for nongreen products and/or services.
  3. It is greener than traditional competition.
  4. It has made an enduring commitment to environmental principles in its business operations.

Ecotechnology is an applied science that seeks to fulfill human needs while causing minimal ecological disruption, by harnessing and manipulating natural forces to leverage their beneficial effects. Ecotechnology integrates two fields of study: the 'ecology of technics' and the 'technics of ecology,' requiring an understanding of the structures and processes of ecosystems and societies. All sustainable engineering that can reduce damage to ecosystems, adopt ecology as a fundamental basis, and ensure conservation of biodiversity and sustainable development may be considered as forms of ecotechnology.

Factor Ten is a social and economic policy program developed by the Factor Ten institute with the stated goal of "provid[ing] practical support for achieving significant advances in sustainable value creation, in particular through increases in resource productivity throughout the economy.

In energy conservation and energy economics, the rebound effect is the reduction in expected gains from new technologies that increase the efficiency of resource use, because of behavioral or other systemic responses. These responses diminish the beneficial effects of the new technology or other measures taken. A definition of the rebound effect is provided by Thiesen et al. (2008) as, “the rebound effect deals with the fact that improvements in efficiency often lead to cost reductions that provide the possibility to buy more of the improved product or other products or services.” A classic example from this perspective is a driver who substitutes a vehicle with a fuel-efficient version, only to reap the benefits of its lower operating expenses to commute longer and more frequently."

<span class="mw-page-title-main">Environmental enterprise</span>

An environmental enterprise is an environmentally friendly/compatible business. Specifically, an environmental enterprise is a business that produces value in the same manner which an ecosystem does, neither producing waste nor consuming unsustainable resources. In addition, an environmental enterprise rather finds alternative ways to produce one's products instead of taking advantage of animals for the sake of human profits. To be closer to the goal of being an environmentally friendly company, some environmental enterprises invest their money to develop or improve their technologies which are also environmentally friendly. In addition, environmental enterprises usually try to reduce global warming, so some companies use materials that are environmentally friendly to build their stores. They also set in place regulations that are environmentally friendly. All these efforts of the environmental enterprises can bring positive effects both for nature and people. The concept is rooted in the well-enumerated theories of natural capital, the eco-economy and cradle to cradle design.

<span class="mw-page-title-main">Sustainability</span> Goal of people safely co-existing on Earth

Sustainability is a social goal for people to co-exist on Earth over a long time. Definitions of this term are disputed and have varied with literature, context, and time. Experts sometimes describe sustainability as having three dimensions : environmental, economic, and social, or people, planet, and profit and many publications emphasize the environmental dimension. Many experts have also expanded the dimensions to account for notable aspects of sustainability, for example future generations or health, thereby using a quadruple bottom line (QBL). In everyday use, sustainability often focuses on countering major environmental problems, including climate change, loss of biodiversity, loss of ecosystem services, land degradation, and air and water pollution. The idea of sustainability can guide decisions at the global, national, and individual levels. A related concept is sustainable development, and the terms are often used to mean the same thing. UNESCO distinguishes the two like this: "Sustainability is often thought of as a long-term goal, while sustainable development refers to the many processes and pathways to achieve it."

Material input per unit of service (MIPS) is an economic concept, originally developed at the Wuppertal Institute, Germany in the 1990s. The MIPS concept can be used to measure eco-efficiency of a product or service and applied in all scales from a single product to complex systems. The calculation takes into account materials required to produce a product or service. The total material input (MI) is divided by the number of service units (S). For example, in case of a passenger car, the number of service units is the total number of passenger kilometres during the whole life span of the vehicle. The lower the material input per kilometre, the more eco-efficient is the vehicle. The whole life-cycle of a product or service is measured when MIPS values are calculated. This allows comparisons of resource consumption of different solutions to produce the same service. When a single product is examined, the MIPS calculations reveal the magnitude of resource use along the life-cycle and help to focus efforts on the most significant phases to reduce environmental burden of the product.

<span class="mw-page-title-main">Green growth</span> Economic growth that is environmentally sustainable

Green growth is a concept in economic theory and policymaking used to describe paths of economic growth that are environmentally sustainable. It is based on the understanding that as long as economic growth remains a predominant goal, a decoupling of economic growth from resource use and adverse environmental impacts is required. As such, green growth is closely related to the concepts of green economy and low-carbon or sustainable development. A main driver for green growth is the transition towards sustainable energy systems. Advocates of green growth policies argue that well-implemented green policies can create opportunities for employment in sectors such as renewable energy, green agriculture, or sustainable forestry.

The EVR model is a life cycle assessment based method to analyse consumption patterns, business strategies and design options in terms of eco-efficient value creation. Next to this it is used to compare products and service systems.

Environmentally sustainable design is the philosophy of designing physical objects, the built environment, and services to comply with the principles of ecological sustainability and also aimed at improving the health and comfort of occupants in a building. Sustainable design seeks to reduce negative impacts on the environment, the health and well-being of building occupants, thereby improving building performance. The basic objectives of sustainability are to reduce the consumption of non-renewable resources, minimize waste, and create healthy, productive environments.

<span class="mw-page-title-main">Circular economy</span> Production model to minimise wastage and emissions

A circular economy is a model of resource production and consumption in any economy that involves sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials and products for as long as possible. The concept aims to tackle global challenges such as climate change, biodiversity loss, waste, and pollution by emphasizing the design-based implementation of the three base principles of the model. The three principles required for the transformation to a circular economy are: designing out waste and pollution; keeping products and materials in use, and regenerating natural systems. CE is defined in contradistinction to the traditional linear economy. The idea and concepts of a circular economy have been studied extensively in academia, business, and government over the past ten years. It has been gaining popularity because it can help to minimize carbon emissions and the consumption of raw materials, open up new market prospects, and, principally, increase the sustainability of consumption.

<span class="mw-page-title-main">Eco-economic decoupling</span> Economy able to grow without corresponding increases in environmental pressure

In economic and environmental fields, decoupling refers to an economy that would be able to grow without corresponding increases in environmental pressure. In many economies, increasing production (GDP) raises pressure on the environment. An economy that would be able to sustain economic growth while reducing the amount of resources such as water or fossil fuels used and delink environmental deterioration at the same time would be said to be decoupled. Environmental pressure is often measured using emissions of pollutants, and decoupling is often measured by the emission intensity of economic output.

<span class="mw-page-title-main">Resource efficiency</span>

Resource efficiency is the maximising of the supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively, with minimum wasted (natural) resource expenses. It means using the Earth's limited resources in a sustainable manner while minimising environmental impact.

Eco-industrial development (EID) is a framework for industry to develop while reducing its impact on the environment. It uses a closed loop production cycle to tackle a broad set of environmental challenges such as soil and water pollution, desertification, species preservation, energy management, by-product synergy, resource efficiency, air quality, etc.

A circular economy is an alternative way countries manage their resources, where instead of using products in the traditional linear make, use, dispose method, resources are used for their maximum utility throughout their life cycle and regenerated in a cyclical pattern minimizing waste. They strive to create economic development through environmental and resource protection. The ideas of a circular economy were officially adopted by China in 2002, when the 16th National Congress of the Chinese Communist Party legislated it as a national endeavour, though various sustainability initiatives were implemented in the previous decades starting in 1973. China adopted the circular economy due to the environmental damage and resource depletion that was occurring from going through its industrialization process. China is currently a world leader in the production of resources, where it produces 46% of the world's aluminum, 50% of steel and 60% of cement, while it has consumed more raw materials than all the countries a part of the Organisation for Economic Co-operation and Development (OECD) combined. In 2014, China created 3.2 billion tonnes of industrial solid waste, where 2 billion tonnes were recovered using recycling, incineration, reusing and composting. By 2025, China is anticipated to produce up to one quarter of the world's municipal solid waste.

References

  1. 1 2 3 4 5 6 7 Huppes, G., & Mansanobu, I. (2007). Quantified eco-efficiency: An introduction with applications. (Vol. 22). Springer London.
  2. 1 2 3 Yadong, Y (2013). "Eco-efficiency trends in china, 1978-2010:decoupling environmental pressure from economic growth". Ecological Indicators. 24: 177–184. doi:10.1016/j.ecolind.2012.06.007.
  3. 1 2 3 4 OECD Secretariat. (2002). Indicators to measure decoupling of environmental pressure from economic growth. Sustainable development, Retrieved from http://www.docstoc.com/docs/84838188/oecd_decoupling
  4. 1 2 3 4 Ehrenfeld, J. R. (2005). "Eco-efficiency: Philosophy, theory and tools". Journal of Industrial Ecology. 9 (4): 6–8. doi:10.1162/108819805775248070. S2CID   145062585.
  5. ↑ McIntyre, R.; Thornton, J. (1978). "On the environmental efficiency of economic systems". Soviet Studies. 30 (2): 173–192. doi:10.1080/09668137808411179.
  6. 1 2 3 4 5 6 7 8 9 10 11 12 World Business Council for Sustainable Development. (2000, August). Eco-efficiency: Creating more with less. Retrieved from "Archived copy" (PDF). Archived from the original (PDF) on 2016-05-15. Retrieved 2013-02-12.{{cite web}}: CS1 maint: archived copy as title (link)
  7. 1 2 Guenster, N.; Bauer, R.; Derwall, J.; Koedijk, K. (2011). "The economic value of corporate eco-efficiency". European Financial Management. 17 (4): 679–704. doi:10.1111/j.1468-036X.2009.00532.x. S2CID   59148023.
  8. 1 2 3 4 BSD Global. (2013). Eco-efficiency: Strategies and tools. Retrieved from http://www.iisd.org/business/tools/bt_eco_eff.aspx
  9. ↑ Lovins, L. Hunter (2008). Rethinking production Archived 2008-04-10 at the Wayback Machine in State of the World 2008, p. 34.
  10. ↑ Herrmann, Christoph; Blume, Stefan; Kurle, Denis; Schmidt, Christopher; Thiede, Sebastian (2015-01-01). "The Positive Impact Factory–Transition from Eco-efficiency to Eco–effectiveness Strategies in Manufacturing". Procedia CIRP. The 22nd CIRP Conference on Life Cycle Engineering. 29: 19–27. doi: 10.1016/j.procir.2015.02.066 . ISSN   2212-8271.
  11. ↑ http://sapiens.revues.org/index1022.html Boulanger, P.M. (2010) "Three strategies for sustainable consumption". S.A.P.I.EN.S.3 (2)
  12. ↑ Huesemann, M.H., and J.A. Huesemann (2011). Technofix: Why Technology Won't Save Us or the Environment, Chapter 5, "In Search of Solutions II: Efficiency Improvements", New Society Publishers, Gabriola Island, Canada.
  13. ↑ Baker, Susan. (2013). Sustainable Development. Taylor & Francis. Retrieved 9 February 2013, from <http://lib.myilibrary.com?ID=40826>
  14. ↑ Government of Canada. (2011, October 06). Eco-efficiency. Retrieved from "What is Eco-efficiency? - Eco-efficiency". Archived from the original on 2013-02-06. Retrieved 2013-02-12.
  15. ↑ Sinkin, C.; Wright, C. J.; Burnett, R. D. (2008). "Eco-efficiency and firm value". Journal of Accounting and Public Policy. 27 (2): 167–176. doi:10.1016/j.jaccpubpol.2008.01.003.
  16. ↑ "Eco-Efficiency and Cleaner Production: Charting the Course to Sustainability The World Business Council for Sustainable Development United Nations Development Programme".

Further reading

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.