Governing the Interplay between Industrial Ecosystems and Environmental Regulation

Many scholars of industrial ecology have focused on the institutional and organizational challenges of building and maintaining regional industrial symbiosis through the synergistic integration of material and energy flows. Despite the promise that these intellectual developments hold for the future dematerialization of industrial production, they rarely address the actual regulatory obstacles of turning wastes into raw materials. In this article we introduce a potential future industrial symbiosis around the Gulf of Bothnia between Finland and Sweden, and assess the regulatory bottlenecks related to waste by‐product consideration. We find that although the Gulf of Bothnia region has technological and economic potential for industrial symbiosis, the regulatory support for this is insufficient. We suggest a common pool resource‐based governance system that could utilize market and regulatory mechanisms in a regional‐level cross‐border system of governance. Importantly, the suggested governance system would protect the users of potential raw materials from unpredictable waste regulation, market risks related to large‐scale material flows, and societal risks of hazardous waste treatment.