A Preliminary Analysis Of The Economic Behavior Underlying The Industrial Symbiosis Phenomenon

Abstract

The industrial symbiosis phenomenon represents the possibility of integrating economic gains and the reduction of environmental damage by providing a framework in which the exchange synergies within an industrial cluster are exploited. There are only a few successful examples in reality, for reasons that will be discussed in the next sections. The objective of this paper to identify the mechanism behind the under-provision of the exchanges that characterize the Industrial Symbiosis phenomenon and determine whether regulation could and should play a role in fostering it, from a Micro-Economics approach. The analysis results in the identification of a specific scenario in which a market failure justifies the government intervention that aims to increase welfare by exploiting the optimal level of Industrial Symbiosis.