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Industrial ecology begins with the examination of the interconnections both within and between industrial and ecological systems. Seeking to transform current industrial processes from linear to cyclical systems, industrial ecology is rooted in the notion that structuring industrial systems to behave as ecosystems do would create sustainable development—where the wastes and by-products created within one system are utilized as energy or raw materials for another system. Just as the death and decay of plant matter provides the nutrients to create rich, fertile soil, the waste and by-products from one industrial process can become the energy and raw materials to fuel another industrial process.

The basic principles of industrial ecology include the following:

  • Modeling technological and industrial systems after ecological systems
  • Reducing the negative impacts of technology on the environment
  • Fostering sustainable technological and societal development
  • Using a holistic approach to view environmental problems
  • Identifying and tracing flows of energy and materials through various systems

An emergent, interdisciplinary field, industrial ecology draws from subjects as diverse as law, economics, business, public health, natural resources, ecology, and engineering. The roots of industrial ecology reach back to the 1950s and 1960s system dynamics work of Jay Forrester, one of the first researchers to define the world as a collection of interconnected systems. Though Forrester's system dynamics work was first used to address corporate management problems, by the 1970s this framework for viewing human interactions had spawned works that focused on environmental degradation and the lack of sustainability of the industrial system. Building on this early systems analysis work, Robert Ayres in 1989 put forth the concept of industrial metabolism—a framework for studying how energy and materials flow through various systems. That same year, a Scientific American article written by Robert Frosch and Nicholas Gallopoulos introduced the idea of industrial ecosystems, and soon the term industrial ecology entered the lexicon. And so, while Forrester's early work was born of efforts to analyze and address very specific social systems—management and employees—his pioneering of system dynamics lies at the heart of industrial ecology and its ideas regarding the relationship between industrial and natural ecosystems. This correlation between industrial and natural ecosystems is essential to industrial ecology.

The 1990s saw further development in the subject of industrial ecology, with the National Academy of Science holding its Colloquium on Industrial Ecology in 1991. This is considered by many to have marked a turning point for how industrial ecology was to be interpreted and embraced as a field of study, not just by academia, but by industry and government as well. The Greening of Industrial Ecosystems, edited by Braden Allenby and Deanna Richards and published by the National Academy of Engineering in 1994, further nurtured the growth of industrial ecology by exploring and defining its core concepts and applications. Beyond examining the implications for industry and the environment, the work also explained how industrial ecology crosses into law, economics, and public policy. By the late 1990s, the Journal of Industrial Ecology was in publication, and in 2000, the International Society for Industrial Ecology was formed. The Norwegian University of Science and Technology offered the first degree program for industrial ecology in the mid-1990s, and today, dozens of other colleges and universities offer degrees, graduate certificate programs, and coursework linked to industrial ecology.

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