The circular economy begins with choice

Sensemaking / The circular economy begins with choice

A billion choices are needed to bring us closer to the realisation of self-sustaining economies where value is created and not lost, says Keith Lawton

By Keith Lawton / 25 May 2016

This article was first published in The Long View 2016 chapter Crisis Catalyst. Please share your thoughts here and join the conversation on social media with #longview2016.

As a species we are driven by our needs, our wants and our choices. Many of today’s most developed economies have been built on foundations of linear consumption – the consumer society as we know it – which some argue is totally incompatible with the material and biological cycles of the Earth’s ecosystems. What will it take for individuals, communities, governments and societies to change their patterns of consumption?

It will take certain choices to be made and in some cases those choices will be difficult – like those made by the residents of Kamikatsu in Japan, who in the early millennium set a 2020 goal of being a zero-waste community. They have worked for the past decade to embed closed-loop behaviours and to cascade the value from their recycling activities back into the community, very neatly demonstrating circular economy principles in the process. For instance, they are sorting their waste into 34 separate categories to reduce residual waste to landfill to as low as possible. The town currently recycles 80% of its waste. Compare this with the latest proposals to set a 65% target for municipal waste recycling for Europe by 2030.

Perhaps most importantly, however, the residents observe that what once was an obvious effort and a challenge has become the new normal. Given time, people can adapt remarkably well to change, if they choose to.

Scaling the positive choices made by this community to societies of hundreds of millions is a substantial leap. It will require the trinity of the right market signals, the right technology and infrastructure, and the right support and incentives for people to make the choice to change.

Looking first at the market signals, there is an obvious truth in the statement that humans are the only species on this planet that produces what is commonly termed ‘garbage’.

There is also truth in the fact that we are now more aware of this than ever before. We have recognised the limits to growth and the need for action, and have started to send the right signals. Policy-makers are aware of the need to use markets more proactively by setting regulatory frameworks that offer financial rewards for action. A recent example is the European Commission’s Closing the Loop circular economy package, with plans to extract the maximum value and use from all raw materials, products and waste, launched at a time when countries were locked in talks about agreeing a global commitment to reduce greenhouse gases and set binding atmospheric carbon dioxide targets (Paris, COP 21). Given the link between lower carbon emissions and a more circular economy, it remains to be seen if the commitments and messages flowing from these high-level initiatives are sufficiently transformative, given the weight of change necessary. Sceptics are certainly making their voices heard.

Creating the right conditions and incentives for individuals, businesses and societies to make the choices that will drive adoption of the circular economy requires more than just policies and programmes, however. Enablers such as full-life cycle design, smart technology and the internet of things will play a powerful role. For example, internet-connected household appliances can be monitored centrally, and feedback provided to users to optimise their use, which saves them money. Where this is combined with pay-per-use or rental models, there are win–win paybacks for operator and user. Eco-design standards and modularisation technology mean that in the future there will be fewer material incompatibility issues and easier value-recovery at end of life.

These myriad changes – some big, some small – to bend our economies from a flat to circular shape add up to financial, environmental and societal benefits that when monetised generate huge numbers. In its 2014 communication on the circular economy, the European Commission quoted net savings for European businesses of the order of €600 billion.

On top of these savings, there are new jobs in the recycling and industrial innovation sectors to be gained as well as reduced environmental impacts and lower lifetime carbon emissions as a consequence of creating a more circular economy. As headline grabbing as these numbers are, most businesses and individuals are failing to rationalise this ‘virtual value’ to the choices they make.

Perhaps here is the real truth. We need to be convinced that changing the way we do things is in our interest. Work by Amec Foster Wheeler as a consultant to business and industry on the circular economy has found a visible disconnect between the calculated opportunities from a circular economy and the actual benefits delivered at the individual or business level. This action gap has typically been plugged by institutional programmes, funds and investment, and yet this positive intent has all too often been marred by failure to sustain more circular approaches.

The reason for this could lie in society not yet having reached a critical mass or ‘tipping point’, or perhaps too many are suffering ‘accountability offload’, believing that someone else will do it on their behalf. In short, I believe too few people are consciously choosing to move closer to a circular economy. If this argument was a see-saw, the circular economy would be a four-year-old at one end and the linear economy an adult at the other. Taking the analogy further, we can be sure the child will grow, and at some point equilibrium will be reached – beyond the tipping point the circular economy will gain the advantage. The question is, have we the time to wait?

Our choices are made within defined boundaries, and often these boundaries are set close to our own lives and the micro-environments we live in. Some say that circular economy campaigns are working to embed ‘bigger picture’ thinking, and this is likely true. Others question how one person’s choice can make a difference.

Maybe the truth lies in the fact that we all need to believe that a single choice is part of something bigger, that it will make a difference. A billion choices are needed to bring us closer to the realisation of self-sustaining economies where value is created and not lost – but each choice in this counts. And the result – a more circular society – will mean we all profit.

Author: Keith Lawton is Director at Amec Foster Wheeler, which is a member of the Forum for the Future Network.

Image credit: Carlos Andrés Reyes / Flickr

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