Industrial Metabolism

Eileen O. van Ravenswaay, Michigan State University

The objective of this chapter is to help you better understand the physical processes involved in
production of consumer products. This knowledge is necessary to understand how production
impacts the environment. It will also be useful later when we examine the business decisions
involved in production and environmental protection.

Production Processes

The purpose of an economy is to produce and distribute the goods and services that consumers
want. The technical term for these consumer products is final goods and services. Production of
final goods and services requires inputs of many intermediate goods and services. The
intermediate goods and services reflect the technology involved in transforming raw matter and
energy extracted from the environment into final goods and services.

For example, a piece of chocolate cake is a final good. It is assembled from ingredients such as
flour, eggs, milk, and so on which are intermediate goods. Each of the ingredients are produced
from still other intermediate goods. Flour comes from grain, eggs from chickens, and milk from
dairy cows. However, several more steps are need to get to the ultimate sources of matter and
energy extracted from the environment. For example, the grain comes from seeds, soil nutrients,
water, solar energy, and carbon dioxide. The seeds come from the biosphere, the soil nutrients
come from the geosphere, the water comes from the hydrosphere, and the solar energy and
carbon dioxide come from the atmosphere.

It is very important to understand that it is the final goods and services that we produce that is
our income. Although income is measured in terms of money, it is the final goods and services,
not the money, which is our income. We can eat, drink, wear, and use final goods and services to
satisfy our wants and needs. We cannot eat, drink, and wear money (well maybe we could, but
we probably wouldn't like it). Money is just an accounting unit and medium of exchange. The
Gross Domestic Product (GDP) is measured in monetary units, but that measure represents the
value of final goods and services, not the amount of money in circulation. The objective of an
economy is to produce final goods and services that people value, not to produce money. Money
is only what we use to measure the value of the goods and services available to us.

The output of final goods and services requires inputs of intermediate goods and a production
technology which is used to transform inputs into outputs. For example, cake ingredients are
mixed and baked. The flour must be milled. The grain must be grown and harvested. Mixing,
baking, milling, growing, and harvesting are technologies. These technologies require human
knowledge and skill (e.g., knowledge of and skill at baking) and equipment, machines, and
facilities (e.g., mixers, ovens, and buildings). Thus, the amount of cake we can produce depends
on the available stocks of human capital (human knowledge and skill) and manufactured
capital (equipment, machines, vehicles, and facilities).
The amount we can produce also depends on two other types of capital. Natural capital is forms
of matter and energy available in the ecosphere. For example, water is available from the
hydrosphere, soil is available from the geosphere, oxygen is available from the atmosphere, and
pollinating insects are available in the biosphere. Social capital is the set of institutions,
organizations, laws and customs that form an economy. For example, governments establish and
enforce property rights that allow people to trade property such as land, structures, machines,
and labor.

The types of intermediate goods and production technologies used to produce final goods and
services are summarized in the Industrial Metabolism (IM) Model (see endnote 1 for references).
The IM process begins with discovery of particular forms of matter and energy in the
environment that can be transformed into intermediate goods. We will call these "discovered"
forms of matter and energy in the environment natural resources. These natural resources
include mineral ores from the geosphere, water from the hydrosphere, gases and solar energy
from the atmosphere, and plants and animals from the biosphere. Note that this use of the term
"natural resources" is very specific and quite different from the common meaning. In this case,
natural resources refer to high quality matter and energy in the environment that have been
found, but not yet been extracted by human beings.

The technology for extracting natural resources includes mining, drilling, and harvesting. Since
natural resources are embedded in the environment, their extraction involves disturbance of other
matter and energy in the environment. For example, mining involves removing the "overburden"
of earth lying above an ore deposit and then separating the ore from the earth's crust. Harvesting
a particular species of fish usually means harvesting other species as well. However, the amount
of disturbance of environment depends on the type of technology involved. Since there are many
possible technologies, there is much choice about the extent of environmental disturbance.

The extracted natural resources are called raw materials. These raw materials are usually
mixtures of desirable matter and energy and undesirable matter and energy. Examples include
mineral ores (e.g., bauxite, chromite, sulfide), crude oil, limestone, sand, gravel, ground and
surface water, brine, fish, logs, and plants. Note that the use of the term "raw materials" is very
specific and differs from the common meaning. Raw materials in the IM model are extracted, but
unrefined, natural resources.

The technology for separating the desired portion of the raw material from the undesired portion
includes refining, smelting, beneficiation, and milling. For example, separating aluminum from
bauxite ore requires large amounts of energy and results in substantial amounts of a caustic waste
product known as "red mud." Energy and catalysts are required to separate elemental chlorine
from brine, resulting in waste water and other biproducts. Energy is required to separate grains
from wheat or rice plants and results in waste plant material. The type of waste products from
separation technologies depend on the type of technology involved as well as the amount of
impurities in the raw materials. These waste products can be disposed of in several ways.
Consequently, the extent of environmental disturbance depends on the technological choices.

Pure materials resulting from separation technologies include elemental metals (e.g., iron, gold,
aluminum, silicon, silver), fossil fuels (e.g., coal, petroleum, natural gas), elemental chemicals
(e.g., chlorine, mercury, sulfur, phosphorus), agricultural commodities (e.g., wheat, corn, rice,
pork bellies), forest products (e.g., lumber and wood pulp), and drinking water. These pure
materials may still contain some impurities and are graded according to purity or quality level.
Energy is used to shape these pure materials into standard sizes or weights (e.g., ingots, barrels).

Pure materials may be used directly to make intermediate or final goods, but often they are first
mixed with other pure materials to form compound materials. Examples of these compound
materials include plastics, foams, metal alloys, glass, ceramics, paints, coatings, inks, detergents,
processed food, and the like. The mixing technologies generally involving heating, cooling,
aeration, fermentation, and chemical processes. Some waste matter and energy may result from
the mixing technology. The resulting compound materials may be quality graded and shaped into
standard sizes and weights (e.g., pellets).

Pure and compound materials are formed into parts. For example, metals are formed into sheets,
pipes, wires, screws, nails, and fasteners. Plastics are formed into sheets, tubes, and pieces.
Ceramics are formed into tiles. Wood pulp is formed into sheets or rolls of paper. Technologies
for forming parts involve a variety of molding, casting, forging, machining, and cutting
procedures. They require energy for heating and water for cooling and cleaning. Parts are usually
made in standard sizes, but may also be customized.

Parts are assembled into a vast array of durable (e.g., washing machines, refrigerators,
automobiles) and nondurable products(e.g., food, beverages, paper). Construction involves
assembly of materials into capital goods such as buildings, roads, sewers, water systems, utility
lines, bridges, railways, harbors, dams, and other structures. Manufacturing involves assembly of
textiles, publications, packaging, furniture, electronic equipment, and food and beverages. These
durable and nondurable products are used to provide final goods and services such as meals,
health care, housing, transportation, communication, sanitation, education, hospitality, and
entertainment.

Eventually, all products wear out. Durable products wear out relatively slowly (e.g., in a few
years). Nondurable products wear out relatively quickly. These worn out products result in
refuse. Technologies for disposing of the refuse include incinerating, composting, and burying.
However, it is also possible to repair, reuse, or recycle refuse. Regardless of which technology is
chosen, additional intermediate goods and capital are required. Thus, more energy and matter
must be extracted from the environment in order to dispose or recycle refuse.

It is important to understand that each of the economic activities in the IM model (i.e., extraction,
separation, mixing, forming, assembling, using, and disposing) requires inputs of energy, matter,
and space from all other stages of the IM model.. The inputs include not only the intermediate
goods from the previous stage of the model, but also intermediate and final goods from all the
other stages as well. For example, separating bauxite (a raw material) into aluminum (a pure
material) requires electricity (another pure material), machines (a product), inputs for the
machines (other parts and products) and disposal of red mud (refuse). Thus, the linear flow in the
IM model reveals only part of the picture. To capture this complexity, we will use an Input-
Output Model, which is discussed in later chapters.
It is also important to understand that each of the economic activities in the IM model (i.e.,
extraction, separation, mixing, forming, assembling, using, and disposing) and generates wastes.
These wastes must be handled and disposed at each stage, not just at the final stage, of the IM
model.

Production and Economic Development

Each stage of energy and matter transformation in the IM model can be accomplished using very
simple or very complex technologies. In a developed economy, extraction, separation, mixing,
forming, and assembling technologies make use of highly developed manufactured capital and
specialized human capital. In an undeveloped economy, the same tasks are performed, but the
technologies use primitive forms of manufactured capital and and human capital. Consequently,
a developed economy can produce a greater quantity, quality, and variety of final goods and
services than an undeveloped economy can.

However, each stage of the transformation process also requires matter and energy inputs and
creates wastes. A developed economy uses more inputs and creates more wastes than an
undeveloped economy. Fortunately, a developed economy can create technologies that increase
natural resource productivity. For example, refuse can be recycled and used as raw materials,
thus reducing extraction of natural resources. The matter and energy required by separation,
mixing, forming, and assembly technologies can reduced. The type of matter and energy used by
these technologies can be changed so as to reduce the type of wastes produced. Wastes that
remain can be turned into valuable natural resources.

The Special Role of Transportation and Communication Services

Transportation and communication services are involved in the production of virtually all
intermediate and final goods and services. For example, the need for raw materials to produce
meals must be somehow communicated to the people who locate natural resources and extract
raw material from them. The availability of the raw materials must be communicated to the
people who separate the raw materials into pure materials and assemble the pure materials into
parts and products. Similarly, the raw materials must be transported to the people who will
separate them into pure materials, and the pure materials must be transported to the people who
will assemble them into parts and products.

In an undeveloped economy, these communication and transportation functions are few. Indeed,
the same individual may be involved in every stage of the IM model, thus eliminating the need
for any transport or communication. In a developed economy, labor productivity is increased by
specializing tasks. For example, some people specialize in extraction for single types of natural
resources. Other people specialize in separation technologies for single types of pure materials.
Still others specialize in mixing single types of compound materials. The greater the degree of
specialization attempted, the greater the need for communication and transportation services.
Likewise, the larger the population and territory size, the more need for communication and
transportation systems.
Communication and transportation activities involve transforming matter and energy from the
environment into communication and transportation services. The transformation process
involves all the stages of the IM model to produce the products required to provide the
communication and transportation services. Thus, like all other goods and services,
communication and transportation services produce wastes and transform the natural
environment.

Review Questions

1. Describe the different kinds of capital involved in the production of economic output. Give an
example of each type for both a developed an undeveloped economy..

2. Describe the industrial metabolism model and give examples of each part of the model.

3. Explain how each stage of IM model is related to the environment. Give examples.

Endnotes

1. The industrial metabolism model presented in this section is adapted from Robert U. Ayres,
1989, "Industrial Metabolism" in Jesse H. Ausubel and Hedy E. Sladovich (Eds.), Technology
and Environment, Washington, D.C.: National Academy Press, pp. 23-49. Examples used to
illustrate the model are drawn from Robert U. Ayres and Leslie W. Ayres, 1996, Industrial
Ecology, Brookfield, VT: Edward Elgar Publishing Co. and Robert U. Ayres and Udo E. Simonis
(Eds.) 1994, Industrial Metabolism: Restructuring for Sustainable Development, New York:
United Nations University Press.

Copyright © 1999 by Eileen O. van Ravenswaay. All rights reserved. Readers may make
verbatim copies of this document for non-commercial purposes by any means, provided that this
copyright notice appears on all such copies.

Last updated by Eileen van Ravenswaay, December 28, 1999.

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