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The Circular Bioeconomy & Cities

Below: Dr. Michael Lakeman

Industrial ecology is an approach or practice that designs and conceptualises man-made ecosystems to operate like natural ecosystems. Industrial ecology also aims to integrate and interact with natural ecosystems in attempts to move from a linear to cyclical system. Industrial ecology can also be described as the study of material and energy flows through industrial systems. This thinking is beneficial firstly, for understanding the impacts of industrial systems on the environment and secondly, for using the principles of ecology to design industrial systems. How might the principles of industrial ecology be used in the context of cities? In other words, how can we better integrate industrial and natural ecosystems to move from linear to circular, closed loop systems?

Dr Michael Lakeman is an industrial ecologist - he works on how energy and matter flow across the landscape and through the economy, and how building connections between disparate players and processes can lead to greater efficiency, resilience, and regenerative outcomes. He believes there are too many difficult challenges facing humanity to try to tackle them one-by-one, and so practices multi-solving, where partnering to create a single course of action brings benefits across multiple impact areas. Currently Dr. Lakeman is working on two thorny, difficult to decarbonise industries: aviation and agriculture. For these, pre-commercial innovation is needed where no existing solutions are available, and Dr Lakeman is right in the thick of bringing such solutions to market.

“I have taken the principles of ecology and used them in the study and design of industrial systems. So for me industrial ecology is very much an example of biomimicry, or duplicating or copying the example that nature has set out in biology. You've noticed if you look at any natural system, there's no waste, resources are reused repeatedly, efficiency is maximised. And through the application of industrial ecology, we can apply those same principles to how we design and implement industrial systems.”

Dr. Lakeman’s work focuses on the circular bioeconomy and in his view, the circular bioeconomy is really a subset of the broader field of industrial ecology. Also championed by the NZ Crown Research Institute Scion, the circular bioeconomy concerns itself primarily with the flows of carbon and embodied energy derived from photosynthesis, which is the ultimate source of all biological energy and mass.

The circular aspect is where industrial systems are designed to minimise waste and make the most of biological resources. The bioeconomy aspect explores how biological or renewable bio-based resources can be substituted for fossil-based resources or how they can be used more efficiently in the industrial economy.

Through his work, Dr. Lakeman studies the connections between different processes that use bio-based resources to maximise resource use efficiency and minimise waste.

The Circular Bioeconomy and the context for cities

Cities represent an important node in bio economies. The biomaterials that serve the city are largely generated outside of the city, but enter the city in the form of food, paper or cardboard. So embodied energy from biology comes into the city in the form of food, or biofuels and flows out of the city as waste streams: either to landfills or through wastewater treatment plants and out into natural waterways after treatment. So a circular bioeconomy is of great relevance to the city because it can provide an opportunity to increase the efficiency of resource use within the city and also increase the resilience of cities.

The opportunity here is to take these wastes and not externalise them: put them out into a landfill or out into the waterways, but reuse the embodied energy and the carbon to generate other things that the city needs. Dr. Lakeman’s work is in the area of sustainable renewable fuels, where municipal solid waste and sewage waste, sources of energy and carbon are used to generate renewable fuels. This capability in a city enhances the resilience of the city as it now can meet its own energy needs. Cities also support the bioeconomy outside its boundaries by being a demand centre, buying the products, goods and services that the rural bioeconomy provides.

What are the opportunities for cities to implement the circular bioeconomy?

1. Internalising externalities

There is a need for policy shifts that enable the full cost of goods and services to be incorporated into the cost of doing business. All of the costs, including ecological and social costs need to be fully accounted for in business models. This could be through a carbon tax or a tax to discharge nitrogen in waterways, so that the full cost of nutrient runoff can be calculated into the cost of goods for the industries that cause this pollution. Paying the true cost of goods and services will stimulate and incentivise businesses and operations to reduce the cost of disposing waste, which opens up the dialogue to change the industrial process that's running parallel to them. Policies that cause an internalization of these externalities are going to be the key enabler for an industrial ecosystem which truly mimics natural biological ecosystems.

2. Funding model innovation

Once policy settings begin to account for externalities and bring them inside business models, the next thing that's needed is the right amounts and the right types of capital to invest in, and build out, these new businesses and new industrial capabilities. Unlike software development where investing $10,000 in a six week incubator can launch a new business, the investment required here is multi year, to support the development of large scale industrial facilities. So we need the sources of capital that can support this type of development: patient capital. There's a lot of work going on in New Zealand and other places around the world developing more patient investment models for impact that are in terms of returns for the upfront investment.

3. Public buy-in

The support of the public is essential to implementing bioeconomies in cities. For governments to be able to lay out and implement a convincing, exciting vision of a future city with a secure bioeconomy, having the buy-in of the broad constituency is key. If policies are put in place that force the costs of externalities to be included in the cost of goods, this could be a financial hardship for citizens who spend a disproportionate amount of their income or available budget on essentials such as food and energy, and so a just transition is needed which is fair, equitable and inclusive. Through appropriate policy design, this just transition could not only alleviate some of those challenges that people at the lower end of the socioeconomic spectrum face, but could provide them with new economic opportunities and the environmental and social benefits of a cleaner, more regenerative, more resilient economy.


To hear Michael talk about industrial ecology, the circular bioeconomy and patient capital, listen to Episode 3 of Moonshot:City

Do you have any comments on this topic? We'd love to hear from you. Email Juhi and Priti at:

Learn more about Dr. Michael Lakeman's work here and read a recent Stuff article by him on how NZ is set up to be a world leader on low-methane agriculture.

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