Saturday, November 18, 2017

May the Circle be Unbroken: full cycle cost analysis


     There are a lot of circles, or cycles, in life. The "Circle of Life" which moves between birth to death back to birth. The "Carbon Dioxide" cycle has CO2 arising from combustion (burning) of materials and then being trapped by living plants to strain it out of the atmosphere but providing the possibility of going back to the atmosphere when the "storage" is burned. Number three is a more "macro-" (big picture) view of recycling and reuse (as talked about in my other blog The Houseboat Philosophy). A fourth (which is the primary focus of this blog) arises from manufacturing. There are others.
     Manufacturing starts with a plan. The plan is based around a finished product. In order to complete the plan, there is a need of a list of components. Each component may be composed from individual parts, and the parts will be created from some original resource. Beyond the list of components, there is assembly/manufacturing, and then sales and distribution.
     The parts that occur between the harvesting of the raw materials and the sales and distribution are typically considered a "normal" aspect of business. A company may outsource (farm out, sub-delegate or sub-contract, etc) parts of the work but all of the parts, whether done directly by the company or not, are part of a "normal" manufacturing process. For many companies, this is the end of their process. However, it is not the end of the cycle. A cycle does not complete until everything is back to the beginning (though rarely EXACTLY the same for the next cycle).
     What does an incomplete cycle look like? With the CO2 cycle, we are seeing the effects right now. More absorbers (plankton in the ocean, trees and other plants on the land) are being displaced while historical (fossil fuels and some current biofuels and other combustibles) "fixed" carbon dioxide is being released into the air.
     In the case of a manufacturing cycle, the direct effect of not completing the cycle is pollution. If the company does not take care of it -- making it part of the product cost -- then it is taken care of by the taxpayers. This is a prevalent form of corporate subsidy -- and part of the reason why environmental laws and protection agencies are needed to prevent some corporations from offloading their costs to the general population.
     What methods are used for handling pollution? Recycling is certainly one method. Containment is another. Unfortunately, ignoring it is another common method which causes other, less direct, costs for health and medical treatment and loss of productivity for farmers, fisherpeople, and others who work within the global environment to produce food or provide recreation. Reduced fishing yields, enormous islands of plastic in the ocean, and a hazardous cycle of needing increasing amounts of pesticides/herbicides/insecticides to maintain crop production levels act as hallmarks of improperly handled pollution.
     In 1900, there was probably more pollution produced per person than there is now. However, since the population was approximately 1/5 of today's population, the total amount of pollution was less. Pollution was more concentrated around industrial areas. This created "dead areas" but, outside of the industrially concentrated sections, nature could largely handle the edge conditions and there were still areas which were able to be self-sustaining. With today's population and the spread of urban areas, there are few areas where nature is able to keep up with the demands upon the ecology.
     If a corporation is to sell products according to a full cycle cost analysis, then all must finish (for the single cycle) in as close to an original condition as possible. That extra cost is added to the price and the company takes on the responsibility for taking care of the pollution and side-effects of harvesting resources. Otherwise, the general populace pays the cost via taxes and deterioration of health and the environment. In either case, the cost exists.
     What other circles, or cycles, are important within your life? What happens if the cycle is interrupted?

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