The history of the soda-chlorine industry illustrates the usefulness of the concept of joint production for empirical analysis. The first theoretical and empirical study on joint production within the present view of Ecological Economics was carried out by Georg Müller-Fürstenberger (1995), analysing the chemical industry. Further case studies on paper, chlorine, cement and sulphuric acid can be found in Baumgärtner et. al. 2006: 271-338. These case studies “serve to demonstrate the importance of the phenomenon of joint production in ecological-economic systems, to show the potential of the concept of joint production for analysing economy-environment interactions, and to illustrate the general results of the approach obtained so far” (Baumgärtner et. al. 2006.: 271).

3.1 Soda-chlorine industry

The phenomenon of joint production raises two fundamental questions for society.

1. At the cognitive (or epistemological) level, one has to ask: In what way does society recognise joint production?

2. At the level of action, society has to ask: What instance and what authorities are responsible for reducing the harmful or even noxious effects to an extent such that they are tolerable?

While the answer to the former question is a scientific one and therefore refers to reality, the latter refers to the concept of responsibility which originates from the world of the mind and the moral. We shall deal with the latter, which is of central importance for environmental politics, in the concept RESPONSIBILITY. Epistemological aspects of the former are examined in the concept IGNORANCE.

Here we want to demonstrate the power and generality of the concept of joint production for environmental analysis and policy by considering the history of the soda-chlorine industry. It is a story of innovation and industrial evolution; it will lead us from the textile industry to the soda-chlorine industry. Since the chlorine industry comprised 60 % of the German chemical industry in the 20th century, it was a major driver of economic growth.

This enables us to show the effects and interaction of the use of natural resources, the invention and innovation of new techniques due to resource scarcity, the pollution of the environment leading to the invention and innovation of new techniques and, in turn, new goods, which brought new environmental damage etc. This evolution of economic activity and its impact on the environment take us back to the middle of the eighteenth century and ultimately up to the middle of the twenty-first century, i.e. a time scale of three hundred years. This will hopefully give the reader an idea of how important it is to consider economic environmental interaction in the long run.

The textile industry was the first industry. It, therefore, it is often called ‘the mother of all industries’. It began in the first half of the eighteenth century. Its development cannot be separated from that of the soda-chlorine industry. In the middle of the eighteenth century, its essential production factor potash was obtained from burning wood. It was needed for bleaching. However, for 1 ton of potash, 1400 tons of birchwood were needed, which soon led to deforestation and thus to resource scarcity. For this reason, it had to be substituted by natural soda which was imported from Egypt and Spain. A steeply rising demand for soda and British sea blockades of the French coasts in the 1760s and 1770s led to shortages in the supply of soda – BASICS OF LIFE. In 1775 the French Academy announced a prize for the invention of a synthetic production process for soda, which was awarded to the doctor of medicine Nicolas Leblanc in 1791.

It took over 30 years until the Leblanc process was introduced to England on a large scale in 1822, and the scarcity of natural soda could thus be overcome. However, as the chemical description of this production shows, there were three joint products in particular, for 100 kg soda yields as joint products: 69 kg HCL (hydrogen chloride), which is a highly poisonous gas, 68 kg CaS (calcium sulphide), and 83 kg CO2 (carbon dioxide).

The poisonous gas hydrogen chloride was released into the air and caused not only damage to the neighbouring agriculture, but in particular to the people living in neighbourhoods around the plants. From 1830, increasing public pressure arose because of serious health problems. The resistance against emissions of hydrogen chloride finally resulted in the passing of the Chlorine Alkali Bill in 1864. As a result, 95 % of the emerging hydrogen chloride had to be converted to hydrochloride acid which was released into neighbouring rivers and lakes. The second join product, calcium sulphide, was deposited in heaps which accumulated to big stocks. At first sight, this seemed to be an adequate solution for this waste product. However, it turned out that chemical reaction within these stocks led to the emergence of water-soluble sulphur compounds. These substances were washed out by precipitation and groundwater, and consequently entered neighbouring bodies of water. These two kinds of pollutants damaged not only the fish stock, but corroded boats’ hulls and floodgates. It took another decade until the Chlorine Alkali Bill was amended in 1874 such that the introduction of fluid waste was regulated.

The socio-political pressure which ultimately resulted in the amendment had first initiated research before a legal manifestation came about. The Deacon process was invented in 1869 which made it possible to extract pure chlorine from hydrochloride acid. Since chlorine is a very multifunctional product, it could be sold on the market. Over the course of time, the demand for chlorine grew rapidly such that soda became a by-product of the chlorine production; this is an example of turning an unwanted joint product, a bad, into a wanted one, a good.

For the sake of brevity, we will just mention that the second joint product, calcium sulphide, was also ultimately treated by a chemical process, which was patented in 1883. This made it possible to regaining in elementary form 90 % of the sulphur contained in the waste. Elementary sulphur can be used for many purposes, in particular for sulphuric acid (see for a case study Baumgärtner et. al. 2006: Chapter 18).

At first sight, it appears that the natural resource scarcities were overcome and that the environmental problems had not only been solved, but the bads even turned into goods. The occurrence of joint production, together with adequate socio-political or legal pressure, provides strong incentives to solve technological conservatism and to invest in research and, in turn, in technological development to deal adequately with joint products. Hence, the phenomenon of joint production may be regarded as a trigger to invention and innovation [see EVOLUTION for further comments]. In summary, we can say the ignorance [IGNORANCE] concerning technical progress had positive and negative effects. The positive effects were the result of creativity initiated by the markets. The negative effects, however, could not be solved by the market, only by politics – ENVIRONMENTAL POLITICS.

3.2 Comparison between theory of external effects and theory of joint production

Let us examine the innovation of the Leblanc process and its repercussions for the environment and the people working in the factories, the farmers and the people living in the neighbourhoods surrounding the factories from

1. the perspective of Mainstream Economics, i.e. the theory of external effects and

2. the perspective of Ecological Economics, the theory of joint production.

To 1. The innovation of the Leblanc process was very much welcomed because many jobs were created in the new soda industry and the textile industry, the capitalists earned a lot of profits, and the consumers wanted to have more and different textiles. Only four decades later in 1864, however, the workers, farmers and people living nearby were rescued from the poisonous gas by the Chlorine Alkali Bill, the fishermen only by its amendment in 1874. Here we clearly see the ex-post character of the theory of external effects of Mainstream Economics since it took so long to reduce the environmental problem.
To 2. Had the Ecological Economics theory of joint production been employed during the innovation in 1822, it would have recognised right from the start the disastrous future repercussions of the three joint products, HCL (hydrogen chloride), and CaS (calcium sulphide) and CO2 (carbon dioxide), described in Section 4.1 above. This fact was known to any chemist and could have been communicated easily to the public in general and the politicians in particular. An ex-ante policy measure devised with the theory of joint production would have been realised immediately, which would have prevented so much damage and so much suffering.

3.3 The destruction of the ozone layer: the CFCs

However, the solution to the hydrogen chlorine problem ultimately only resulted in moving the environmental problems linked to chlorine from the production sphere to the consumption sphere, since the disposal of goods containing chlorine is highly problematic. In particular, burning them leads to extremely poisonous gases, dioxins. It is for this reason that the German Advisory Council for the Environment maintains that in 1990 the expansion of the chlorine industry was a major mistake of the 20th century. We want to illustrate this conclusion using one compound of the chlorine industry, the CFCs, the chlorofluorocarbons. This example demonstrates that the application of the theory of joint production was decisive in avoiding further severe environmental damage.

The chlorofluorocarbons were created experimentally around 1870. They have particularly good characteristics: They are not poisonous, are incombustible and can be employed for very different applications, especially for cooling and heat isolators. They are an essential part of our way of life. Over the course of time, a tremendous number of factories were built to produce refrigerators, freezers, refrigerator trucks and wagons, and cold storage facilities. In 1974, 700,000 tons of CFCs were manufactured, and 350,000 tons of CFCs were emitted from stocks of cooling devices. In 1974 it was discovered that the CFCs, due to their stability, could rise into the stratosphere which is 12 to 35 km over the earth’s surface and destroy the ozone layer. The discovery of the destruction of great parts of it in 1984 came as great surprise and shock – IGNORANCE. Projections show it will take until 2050 before the ozone layer will reach the concentration levels present in 1970. Thus, the history of the CFCs comprises a time span of nearly two centuries. Again, the environmental damage could not be resolved via the market but only by a world-wide international agreement, the so-called Montreal Protocol of 1989.

3.4 Joint production as a comprehensible principle

It is worth pointing out that joint production fulfils an important demand of Ecological Economics, which states that “it is clearly desirable that fundamental concepts of Ecological Economics should be easily comprehensible. It has often been noted in the literature (e.g. Norton 1992) that the scientific approach is sufficient neither for the recognition of environmental problems, nor for their solution. Concerning recognition, as a matter of history, the awareness of environmental degradation was, to a large extent, brought about not by the scientific community, but by laypeople. Often, it was individuals or small groups who first publicly noted that the natural environment was being changed. In everyday life, attentive human beings can recognise many dimensions of the natural environment, while science, by its nature, has to reduce the wholeness of an event to only those aspects to which its methods are suited.

The second important reason why central concepts of Ecological Economics should be easily comprehensible for “the person in the street” concerns the resolution of environmental problems. In democratic societies, decisions about what kind of environmental policy is to be enacted are made (effectively) by ballot. Hence, voters have to understand environmental issues and their proposed solutions.

We have often noted in discussions with scientists who had no background in economics and with laypeople that they were able to comprehend the nature of an environmental problem and to appreciate a proposed solution much more easily when such issues were explained in terms of joint production, rather than in other economic terms, for example production functions, damage functions, externalities, Pigouvian taxes, etc” (Baumgärtner 2006: 9). The reason for this statement is that every lay person can see, smell, hear and feel the joint products of manufacturing; the concepts of mainstream economic mentioned above are very abstract and difficult to understand. Nevertheless, the theory of external effects is, as stated above, a useful approach to analyse environmental issues and to develop policy recommendations.

Finally, it is worth mentioning that the ubiquitous nature of joint production has led physicist, economist and philosophers to jointly analyse the question as to what the relationship is between joint production and responsibility, for if every production is joint production then the question of responsibility has new relevance, not only for economic actors but also for policy makers [RESPONSIBILITY, Petersen and Faber (2003, 2004) and Baumgärtner et al. 2006: Part III Ethics, which deals extensively with the relationship between joint production and responsibility].