China, Resources, and the Circular Economy

Center for Industrial Ecology

Yale School of Forestry & Environmental Studies

耶鲁大学森林与环境学院产业生态学中心Prof. Marian ChertowPresentation to:

Mandarin China – Yale Educational TravelOctober 2008

Outline Physical resources and the need to improve

overall efficiency Development models leading to the circular

economy The Circular Economy Promotion Law and

its relationship to industrial ecology Implications for improving resource

productivity based on circular economy and industrial ecology

Great resource productivity – land, labor, and capital = the Chinese economic miracle

World’s largest population with world’s fastest growing economy:

Forty fold increase in international trade between 1978 and 2003.

Since 2002, China has overtaken the US to receive the most foreign investment annually of any country.

The endowment of resources in China is small and distributed

unevenly

China has:

1.8% of the world’s total oil reserves, 0.7% of natural gas, 0.9% of iron ore, 5% of copper ore, and 2% of aluminum

With regard to per capita resources, China has: half the world average in mineral

resources, one-third in arable land and grassland, one-fourth in water resources, one-fifth in forest, one-seventh in energy, and only one-tenth in oil

Information Office of the China State Council 2006

Example of rising consumption and declining resources

Five fold increase in fish consumption/person in the past 25 years according to UN FAO

The catch of wild fish in the Yangtze has declined 75%.

China is the world’s largest producer of aquaculture grown food with fish production increasing approx. 250% in 18 years

China is the only country in which aquaculture provide more fish and aquatic food than wild fisheries.

Liu and Diamond – Nature Vol 435 June 2005

Primary energy consumption, 2007

Source: BP Statistical Review, 2008

Oil, coal, natural gas supply and demand

Oil

Natural gas

Coal

ProductionConsumption

Source: BP Statistical Review, 2008

National People’s Congress – Environmental

Protection & Resources Conservation Committee

On the need for modernization:

“China has been facing serious environmental and resources problems with its economic development since the 1980s, mainly due to inefficient use of resources”

“Industrial ecology is the study of the flows of materials and energy in

industrial and consumer activities, of the effects of these flows on the

environment, and of the influences of economic, political, regulatory, and social factors on the flow, use, and

transformation of resources.”

Defining Industrial Ecology Robert White NAE 1994

11

From a traditional perspective to an -industrial ecology

perspective

IndustrialSystem

NaturalSystem

NaturalSystem

Economic

System

Industry Embedded in Nature

Source: R. U. Ayres, 1993

REALMOF THE

MARKET

water for drinking, washing, cooking & sewage

irrigation water

respiration, transpiration

ozone

for combustion

(carbon cycle, nitrogen cycle)

ph

oto

syn

thes

is

rain

recycling

water forflotation

minerals,fuels

food,fiber nutrient

recycling

to landfills,oceans

ground water, rain

photosynthesissoil organisms, pests, etc.

algaebacteriafungi

wormsinsects

birdsetc.

surface,ground

frompublic orunowned

land

fromprivate property

cultivation &husbandry onprivate land

hunting,fishing,grazing

oncommon

land

air forcombustion

combustionproducts

garbage,refuse,sewage

products,services

AGRICULTURE & FORESTRY

SUN AIR

SCENERY,

"ENVIRONMEN

T

CONDITIONING

”

HOUSEHOLDS

&

"PERSONAL

CONSUMPTION”

WATERMANUFACTURING,CONSTRUCTION,

TRANSPORT DISTRI-BUTION SERVICES

WASTEDISPOSAL

BIOTA

MINING & DRILLING

decayorga-nisms

industrialwastes

processwater

NaturalSystem

Economic

System

NaturalSystem

EconomicSystem

EconomicSystem

NaturalSystem

Evolving understanding of the fundamental question of development

‘‘development is of overriding importance’’

‘‘development is the top priority’’ ‘‘overall, balanced and sustainable

development’’ (2003) “harmonious society”

gradually giving birth to a scientific philosophy of development specific to China

National People’s Congress 3-08 The Scientific Outlook on Development “takes

development as its essence, putting people first as its core, comprehensive, balanced and sustainable development as its basic requirement, and overall consideration as its fundamental approach.”

China must pursue more than simple output growth.

Development needs to go beyond economics, to include political, social and cultural aspects in order to achieve the aim of the CCP of “building a moderately prosperous society by 2020.”

National People’s Congress March 2008 Hu Jintao: promoting balanced

development and promoting a conservation culture by

forming an energy- and resource-efficient and environment-friendly structure of industries, pattern of growth and mode of consumption.

China’s Call for a Circular Economy

The resources and environment in China are not available to provide a growing population with higher standards in a Western lifestyle of consumption.

The challenge for China is to create an alternative to Western development modes which would meet the needs for development while maintaining and even improving the health of ecosystem

A new industrialization model…for reconciling China’s twin goals

To increase economic growth

and social welfare

2000 2010 2020 2050

To decrease resource

consumption and pollution

Revised from: Prof. Zhu Dajian

China’s circular economy: a new economic pattern for future development The circular economy organizes economic

activities towards a closed loop process of:

‘resource – production – consumption – regenerated resource’.

“All materials and energy are used rationally and continuously in sustained economy cycles, and the harmful effects of emissions and pollutants can be reduced to a minimal level.”

Qian Yi, November 2007

Three life-cycle phases of Circular Economy

closed loop materials

Materialsextraction

Material production

Final production distribution

Consumeruse Waste disposal

Material-reuse and recycle

The production phase The use phase

The end of life phase

Path to Passage for CE Law December 2005 NPC Environmental Protection and

Resources Conservation Committee starts to draft law. Collected more than 1,000 suggestions from relevant government departments, colleges, and local people's congresses this year to “perfect the draft.”

August 26, 2007, Circular Economy Law Amendment Bill was submitted for the first time to NPC Standing Committee for consideration. It consisted of 7 chapters and 61 entries. Main theme is “Reduce, Reuse and Recycle.”

August 29, 2008 Circular Economy Promotion Law received third reading and is passed.

Circular Economy operates at three levels Enterprises with cleaner production

Eco-industrial parks/zones/industrial symbiosis

Integration of production and consumption at city/province level

Revised from: Prof. Zhu Dajian

Waigaoqiao Power Plant Power Station

Industrial Activity: Power generation

Footprint/Physical Size: 144 hectares

MATERIAL INPUTS

5.9 million tons/year

high sulfur coal

ENERGY REQUIREMENTS

N/A (Energy producer)

WATER REQUIREMENTS

14*1010 L/year saltwater (cooling)

Freshwater (purified) for steam

PRODUCTS

14.8 Billion kWh per year

Electricity

NON-PRODUCT OUTPUTS/WASTES

CO2 16 million tons/year

SOx 105,000 tons/year

NOx 140,000 tons/year

Elevated temperature wastewater 14*1010 L/year

Fly Ash & Bottom Ash 570,000 tons year

Waste solvents (cleaning)

Waste oil

Enterprise level flows - A profile

Material Chains: Guitang Group, Guigang City, Guangxi Autonomous Region

Source: Q. Zhu and R. Côté, 2004

“In an industrial ecosystem, the consumption of energy and materials is optimized,

waste generation is minimized, and the

effluents from one process serve as the raw material

for another”

R.A. Frosch, and N. Gallopoulos, Strategies for manufacturing Scientific American, 260 (3), 144, 1989

Sludge(treated)

Liquid Fertilizer

Farms

Cement;roads

Fishfarming

Water

Water

Water

Fly ash

Heat

ScrubberSludge

Gas

Steam

Ste

am

Sulfur

A-S Bioteknisk Jordrens

Sludge

Ste

am Coo

ling

wat

er

Statoil Refinery

LakeTissø

Boi

ler

wat

er

Yeast slurry Recovered nickel and vanadium

The Industrial Ecosystem of Kalundborg, Denmark

Energy E2 PowerEnergy E2 PowerStationStation

Pharmaceutical

Municipality of Kalundborg

District heating

Wall-board PlantSludge(treated)

Sample Benefits of Industrial Symbiosis to Kalundborg Participants

Water savings Oil refinery – 1.2 million cubic meters Power station – total consumption reduced by 60%

Input chemicals/products 170,000 tons of gypsum 97,000 cubic meters of solid biomass (NovoGro 30) 280,000 cubic meters of liquid biomass (NovoGro)

Wastes avoided through interchanges 50,000-70,000 tons of fly ash from power station 2800 tons of sulfur as hydrogen sulfide in flue gas from oil

refinery

Identifying Circular Flows in Tianjin TEDA

Circular Economy Promotion Law as of August 29, 2008 (1)

Close monitoring of energy consumption and pollutionin heavy consuming and polluting industries (steel and non-ferrous metal production, power generation, oil refining, construction, printing)

Gov’t promote recycling and improving energy-saving and waste-reutilization standards; develop policies to divert capital into environment- friendly industries

Adoption of renewable products in new buildings Requires enterprises to make comprehensive use of coal

mine waste, coal ash, and other waste materials Encourages farmers to recycle straw, livestock waste, and

farming by-products to produce methane

Source: Xinhua News, 2008

Circular Economy Promotion Law as of August 29, 2008 (2)

Central govt will allocate funds and capital to enterprises to encourage innovation in recycling technologies, and provide tax breaks to enterprises introducing and using energy-efficient technologies

Companies using prohibited technologies will face fines of 50,000 yuan ($7295.86) to 200,000 yuan

Source: Xinhua News, 2008

Final version of law vs. draft to be enacted January 1, 2009 Deleted:

Article 26.1: implementation of system of graduated increase of prices and fees for electricity, gas, tap water

Article 40: Owners of scrapped motor vehicles shall sell and deliver the vehicles to enterprises engaged in recovering such vehicles

Article 14.3: The State Council and local governments above the county level shall report progress of recycling economy.

Addition: Article 46: The state adopts a price policy that will encourage

conservation of water, electric power, gas, and other resources. Article 29: An environmental impact assessment shall be

conducted before any industrial park or zone is built or rebuilt, and measures for ecological protection and pollution control shall be taken.

Source: Xinhua News 2008, McElwee, Charlie. (2008) China Environmental Law blog

第二十七条 【服务业节约】Article 27 Saving in Service Industry

餐饮、娱乐、宾馆等服务性企业，应当优先采用节能、节水和环境友好的产品，减少使用或者不使用浪费资源、污染环境的产品。

Catering, entertainment enterprises, hotels and other service enterprises shall adopt energy saving, water saving and environmental friendly products in priority to reduce the use or not to use any products that squander resources and pollute environment.

Compatibility of circular economy

and industrial ecology

Circular economy as policy and strategy Industrial ecology as providing essential intellectual

underpinnings for circular economy

CE Implications: China Iron Cycle 2004

Data Source: Tao Wang, Yale Univ.Design: B. Reck

37

Per capita iron stocks in industrialized countries provide clues about future iron use

Müller et al., PNAS, 44, 16111-16116, 2006)

E-waste recycling in Guiyu – the nightmare

MFA Taizhou Chiho-Tiande Metals in 2006

250,000 tons scrap electric motors

150,000 tons steel scrap

45,000 tons copper scrap

20,000 tons scrap silicon steel sheets

30,000 tons secondary aluminum2% solid residues

to be disposed of

E-waste recycling in China: not whether but how

E-waste recycling is ultimately a labor-intensive business and thus China has a comparative advantage.

China needs an ever growing supply of raw materials and secondary materials have both resource scarcity and energy dividends in satisfying the demands.

Therefore the question is not whether China will recycle E-wastes from developed countries but how to do it in a sustainable manner.

Shi Han April 2008

Program on Industrial Ecology in Developing Countries Received funding for start-up of a new program

under Yale’s Center for Industrial Ecology and funding for projects in China

Work with international colleagues to adapt industrial ecology theory and practice to the realities faced in rapidly industrializing developing countries related to the co-mingled problems of global warming, energy efficiency, water quality and quantity, material reuse, and waste management.

Doing Circular Economy Planning in Tianjin Binhai New Area

Industrial Ecology and the Circular Economy

“ 产业生态学试图根据我们对自然生态系统的认识（资源循环利用、食物网等），对产业生态系统进行重建……”

—— Erkman and Ramaswamy, 2003

“The aim of industrial ecology is to restructure the industrial system, inspired by our understanding of biological ecosystems (cyclic use of resources, food webs, etc)…”

物盡其用Wu(4) Jin(4) Qi(2) Yong(4)

人盡其才Ren(2) Jin(4) Qi(2) Cai(2)