1.2.4 Structure

Integrated Product Policy

The relationships among concepts discussed in this book are presented in Figure 1.1. At the centre of the IPP’s interest lies a product and the environmental impacts associated with its life-cycle. Thus, one can associate the IPP with these two fields in Figure 1.1. Product life-cycles also constitute the focus of life-cycle assessment (LCA) and eco-design, two of the tools associated with industrial ecology. Furthermore, as industrial ecology is generally used to study economy-environment interactions, but following a specific idea of imitating natural solutions in industry, it falls into the broader area of ecological eco­nomics. The latter encompasses all efforts to study such interactions and pro­vides a platform for interdisciplinary and diversified discussions that deal with them. Finally, in Figure 1.1, there also appears an oval representing input-output analysis, indicating its applicability to all of the other fields. Indeed, input-output methodology constitutes a widely used framework for studying economy-environment interactions, within ecological economics, industrial ecology and also LCA. As it can help to study indirect environmental impacts associated with product life-cycles, it can also be useful in the case of the IPP. One can see that moving from the broadest structures – ecological economics and industrial ecology – to more specific issues – LCA and eco-design – the theory becomes increasingly relevant to the IPP. The structure of this book reflects this gradation of relevance.

After this introduction, I present the state of development of the IPP at the end of 2006 (Chapter 2), followed by what I treat as its potential conceptual background in a hierarchically descending order. I first introduce the broadest area of ecological economics (Chapter 3) and then elaborate on a narrower area of industrial ecology (Chapter 4) and its most important aspects related to the IPP – LCA and eco-design (Chapter 5). To complete this theoretical overview, in Chapter 6, I refer to input-output analysis as a modelling approach potentially valuable for the IPP. In Chapter 7, I attempt to draw some policy conclusions regarding the desired character of the IPP, in the light of the theoretical implica­tions presented in all of the preceding chapters. This policy analysis is illustrated with case studies, so as to explore the extent to which the current policies tar­geted at passenger cars, and the product-oriented environmental policy of the Netherlands, conform to those conclusions. Final conclusions in Chapter 8 close this book.

More precisely, in Chapter 2, I present the IPP, against the background of other product-oriented environmental policies pursued in the EO. The IPP sets out to address problems such as increased environmental pressures resulting from an increased amount of products consumed in the market, and the com­plexity of products and product chains. Thus, it needs to adopt an integrated and interdisciplinary approach, based especially on enhanced cooperation between various stakeholders linked within product chains. Being still under develop­ment and being a policy framework rather than a specific policy, the IPP sets only broad objectives and merely sketches the ways in which they can be achieved. Nevertheless, it has already aroused much discussion regarding its final shape, including within EO institutions. It has been criticized for not being sufficiently holistic (or indeed, integrated), but the authors who made such criti­cisms have not presented any comprehensive analysis of this issue.

Ecological economics is presented in Chapter 3, as divided into the three levels of considerations addressed within it ~ primary (biophysical), secondary (economic) and tertiary (strategic). This division results from the interdiscipli­narity of ecological economics and from the fact that it is founded on the assumption that the economy is embedded in a larger natural system, and as such is constrained by the same biophysical laws that govern the latter. Thus, any analysis performed within ecological economics has to take into account the biophysical laws. It is noted that the economic considerations of ecological eco­nomics are close to those of environmental and resource economics and ( neo )institutional economics. Finally, strategic considerations, such as systems thinking or the precautionary principle, provide an overall framework within which any analysis in ecological economics must be pursued. Although ecolo­gical economics does not directly refer to products, it offers a general framework for analysing economy-environment interactions, which constitute a background for the IPP. As such, the implications from ecological economics can be per­ceived of as necessary for any policy attempting to shape economy-environment interactions.

Industrial ecology (presented in Chapter 4) focuses on material and energy flows between the economy and the environment. Hence, it directly links to industry, which is largely responsible for those flows, and to products, which ultimately ‘embody’ these materials and energy. Nevertheless, because of its holistic perspective, industrial ecology also includes indirect (or hidden) flows that are necessary to manufacture products (or extract resources from which they are manufactured), but do not become embodied in products as such. Thus, it attempts to study products as thoroughly as possible and supplies a set of tools that can be used to implement the IPP in practice. Moreover, as industrial ecology is based on a metaphor comparing industrial systems to ecosystems, it affords insights into how industrial activity could be organized, so as to increase its efficiency and resilience (and sustainability). For example, environmental impacts of products could be reduced if interconnectedness among stakeholders involved in product chains was higher, and, in particular, if they paid more attention to sharing information related to such impacts. Finally, in Chapter 4, I analyse the relationship between industrial ecology and ecological economics.

LCA and eco-design (Chapter 5) are examples of tools (most often associated with industrial ecology) already invoked in the IPP and that should be further sup­ported within its framework. They rely on information and can be utilized to dis­seminate information among consumers (intermediate or final), and as such can influence their consumption patterns. The LCA procedure consists of four steps (goal and scope definition, inventory analysis, impact assessment and interpreta­tion of results), which can later be used to support eco-design initiatives. The latter can improve the environmental characteristics of products. However, both LCA and eco-design focus on singular products and thus can ensure only a relative reduction of environmental pressure related to a given product. Thus, they can be further reinforced with other concepts, such as product-service systems (PSS), allowing for the reorganization of the current consumption patterns, based on an idea that it is a service that a given product provides rather than its physical form that satisfies a consumer’s need. Actually, the latter idea is widely adopted within ecological economics and industrial ecology.

In Chapter 6, I present input-output analysis. Its most important applications include studying the interdependence within economic systems and accounting for the indirect effects induced by changes in final consumption. As input-output methods represent the structure of the economy, their extensions are also valuable for studying economy-environment interactions. In particular, it can serve to complement an LCA in order to obtain a more comprehensive picture of the environmental impacts of a product throughout its life-cycle.

Chapter 7 offers an overview of the major implications of ecological eco­nomics and industrial ecology for the IPP. Also, I attempt a critical review of the IPP from the perspective of those implications. In the light of the whole study, it transpires that the IPP is not as integrated as it claims to be and that this aspect needs to be modified, if the IPP is to conform with the theoretical insights from ecological economics and industrial ecology. Among the most important of these insights is the notion that it is a service that a product provides which is consumed, and not its material form; this is strongly emphasized in LCA, which invokes the notion of functional thinking. If widely promoted, this approach could make consumption more ‘reasonable’ and eventually lead to the decoupling of economic growth from its environmental consequences. This should be complemented with other strategies, such as product take-back and product design, both of which are addressed in the IPP. Two case studies help to verify whether existing policies take into account the implications put forward in this chapter. They concentrate on policy attempts to reduce the impacts of one of the most environmentally harmful products used by consumers (the passenger car); and on product-oriented environmental policy in the Netherlands, which often serves as a model for other countries to follow.

As argued in the concluding Chapter 8, to be comprehensive, the IPP (and by extension any other product-oriented environmental policy) should refer to the theoretical insights of ecological economics and industrial ecology, including those concerning LCA, eco-design and, possibly, input-output analysis.