Design of Sustainable Product Systems & Supply Chains

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1 Design of Sustainable Product Systems & Supply Chains Joseph Fiksel Sustainability Advisor, U.S. EPA Office of Research & Development* Executive Director, Center for Resilience The Ohio State University, USA *The content of this presentation reflects the views of the author and does not represent the policies or position of the U.S. EPA.

2 Trajectory of Human Progress Source: Global Footprint Network Desired Region

3 Sustainability Paradigm It is important for EPA to optimize all three pillars of sustainability decisions that further one of the three pillars should, to the extent possible, further the other two. ENVIRONMENT Natural Resource Protection SOCIETY Human Health & Well Being ECONOMY Prosperity & Alleviation of Poverty NRC Green Book, 2011

4 Changing the Game at U.S. EPA The major challenges to sustainability, human health, and the environment are not incremental problems, and they do not lend themselves to incremental solutions.only by implementing systems thinking and integrative approaches to complement our traditional single-discipline approaches, will we be better able to solve these challenging problems. Paul Anastas, ORD Assistant Administrator Well-conceived, effectively implemented environmental protection is good for economic growth. Lisa Jackson, EPA Administrator

5 What is systems thinking? A holistic approach for understanding the interactions and feedback loops among Economic systems companies, supply chains. Ecological systems forests, watersheds. Societal systems communities, networks. Helps to consider the potential benefits and unintended consequences of human interventions, such as new policies, new technologies, and new business practices

6 Systems Thinking: Triple Value Model Industry (economic capital) Society (human capital) economic value ecological goods and services are utilized in industry waste recovery talent waste and emissions may degrade the environment exposure & risk Environment (natural capital) protection & restoration ecological amenities are enjoyed by society

7 Opportunities for Intervention Industry (economic capital) Servicizing Society (human capital) Dematerialization Green Chemistry Education Value Recovery Regulation Conservation Innovation Environment (natural capital) Preservation Remediation

8 Example: Corn Ethanol Product System

9 Biofuel Life Cycle Assessment 8 Gasoline Return on Energy 6 4 Crop Cellulosic Ethanol Biodiesel MSW Cellulosic Ethanol 2 0 Corn Ethanol Renewability 0% 50% 100% Source: A. Baral and B. R. Bakshi, The Role of Ecological Resources and Aggregate Thermodynamic Metrics for Assessing the Life Cycle of Some Biomass and Fossil Fuels, Environmental Science and Technology, 2009

10 The Hidden Mountain of Resource Use Direct resource consumption Full ecological footprint Supply chain Footprint $ Purchased goods & services (indirect) Embedded ecosystem goods and services e.g., water resources

11 Example: Snack Food Industry Embedded natural capital for a typical U.S. snack food supply chain, converted into energy equivalents (joules) Natural Capital Consumed (joules) per $million Output per million dollars of economic output 1.E+17 1.E+16 1.E+15 1.E million gallons 120 barrels 1.E+13 1.E+12 1.E+11 1.E+10 1.E+09 1.E+08 Soil Erosion Sunlight Hydropotential Geothermal Wind Grass Wood Water Crude oil Natural gas Raw Coal Metals & mining Non-metallic minerals Crushed Stone Sand Detrital matter Nuclear Source: OSU Center for Resilience Eco-LCA

12 Sustainable Materials Management an approach to promote sustainable materials use, integrating actions targeted at reducing negative environmental impacts and preserving natural capital throughout the life-cycle of materials, taking into account economic efficiency and social equity. Working Group on Waste Prevention and Recycling

13 Material-Energy-Water Nexus Material demand is a major driver of both energy and water use Energy excludes ecosystem services Materials ~ 1 kg per liter ~ 100 liters per $ Water Source: J. Fiksel, Evaluating Supply Chain Sustainability, Chemical Engineering Progress, May 2010.

14 Sustainability Progress Indicators Greenhouse Gas Emissions Human Need Fulfillment Energy Intensity Persistent Toxic Emissions Energy Efficiency Health & safety Improvement Environmental Footprint Societal Value Water Intensity Solid Waste Intensity Resource Conservation Asset Recovery Land Intensity Non-Renewable Resource Intensity Economic Development Poverty Alleviation

15 The Need for Collaboration Incremental improvements in supply chain efficiency will not be sufficient to offset global economic growth Transformational change in production and consumption patterns will require broad collaboration between government, industry, and civil society Companies are already collaborating with suppliers, customers, competitors, and environmental advocacy groups

16 Supply Networks: Robust and Fragile Global imports to the UK Line thickness denotes quantity of imports Source: New Economic Foundation

17 Sustainability and Resilience Sustainability is the capacity for long-term realization of human health and well being, economic prosperity, & environmental protection However, unforeseen conditions can lead to unintended and/or undesired consequences Resilience is the capacity to survive, adapt, and flourish in the face of changing conditions and potential disruptions In a complex and turbulent world, resilience is a prerequisite for realization of sustainability goals

18 Design for Environment Joseph Fiksel McGraw-Hill, July 2009 (Paperback edition 2011) Disruptive Innovation Product Development Process Eco-Efficiency Life Cycle Management Business Value Creation Supply Chain Sustainability

19 We shall require a substantially new manner of thinking if mankind is to survive. Albert Einstein