Circular Economy: Past, Present and Future

For a society accustomed to the achievements of a linear economy, the transition to a circular economic system is a hard task even to contemplate. Although the changes needed may seem daunting, it is important to remember that we have already come a long way. However, the history of the waste hierarchy has taught that political perseverance and unity of approach are essential to achieving long term visions in supply chain management.

Looking back, it is helpful to view the significance of the Lansink’s Ladder in the light of the sustainability gains it has already instigated. From the outset, the Ladder encountered criticism, in part because the intuitive preference order it expresses is not (and has never been put forward as) scientifically rigorous. Opposition came from those who feared the hierarchy would impede economic growth and clash with an increasingly consumerist society. The business community expressed concerns about regulatory burdens and the cost of implementing change.

Circular-Economy

However, such criticism was not able to shake political support, either in Holland where the Ladder was adopted in the Dutch Environmental Protection Act of 1979, or subsequently across Europe, as the Waste Hierarchy was transposed into national legislation as a result of the revised Waste Framework Directive.

Prevention, reuse and recycling have become widely used words as awareness has increased that our industrial societies will eventually suffer a shortage of raw materials and energy. So, should we see the waste hierarchy as laying the first slabs of the long road to a circular economy? Or is the circular economy a radical new departure?

Positive and negative thinking

There have been two major transitionary periods in waste management: public health was the primary driver for the first, from roughly 1900 to 1960, in which waste removal was formalised as a means to avoid disease. The second gained momentum in the 1980s, when prevention, reuse and recovery came on the agenda. However, consolidation of the second transition has in turn revealed new drivers for a third. Although analysing drivers is always tricky – requiring a thorough study of causes and effects – a general indication is helpful for further discussion. Positive (+) and negative (-) drivers for a third transition may be:

(+) The development of material supply chain management through the combination of waste hierarchy thinking with cradle to cradle eco design;

(+) The need for sustainable energy solutions;

(+) Scarcity of raw materials necessary for technological innovation; and

(+) Progressive development of circular economy models, with increasing awareness of social, financial and economic barriers.

(-) Growth of the global economy, especially in China and India, and later in Africa;

(-) Continued growth in global travel;

(-) Rising energy demand, exceeding what can be produced from renewable energy sources and threatening further global warming;

(-) Biodiversity loss, causing a further ecological impoverishment; and

(-) Conservation of the principle of ownership, which hinders the development of the so-called ‘lease society’. 

A clear steer

As the direction, scale and weight of these drivers are difficult to assess, it’s necessary to steer developments at all levels to a sustainable solution. The second transition taught that governmental control appears indispensable, and that regulation stimulates innovation so long as adequate space is left for industry and producers to develop their own means of satisfying their legislated responsibilities.

The European Waste Framework Directive has been one such stimulatory piece of legislation. Unfortunately, the EC has decided to withdraw its Circular Economy package, which would otherwise now be on track to deliver the additional innovation needed to achieve its goals – including higher recycling targets. Messrs. Juncker and Timmermans must now either bring forward the more ambitious legislation they have hinted at, or explain why they have abandoned the serious proposals of their predecessors.

Perhaps the major differences between Member States and other countries may require a preliminary two-speed policy, but any differences in timetable between Western Europe and other countries should not stand in the way of innovation, and differences of opinion between the European Parliament and the Commission must be removed for Europe to remain credible.

Governmental control requires clear rules and definitions, and for legislative terminology to be commensurate with policy objectives. One failing in this area is the use of the generic term ‘recovery’ to cover product reuse, recycling and incineration with energy recovery, which confuses the hierarchy’s preference order. The granting of R1 status to waste incineration plants, although understandable in terms of energy diversification, turns waste processors into energy producers benefiting from full ovens. Feeding these plants reduces the scope for recycling (e.g. plastics) and increases COemissions. When relatively inefficient incinerators still appear to qualify for R1 status, it offers confusing policy signals for governments, investors and waste services providers alike.

The key role for government also is to set clear targets and create the space for producers and consumers to generate workable solutions. The waste hierarchy’s preference order is best served by transparent minimum standards, grouped around product reuse, material recycling or disposal by combustion. For designated product or material categories, multiple minimum standards are possible following preparation of the initial waste streams, which can be tightened as technological developments allow.

Where the rubber meets the road

As waste markets increase in scale, are liberalised, and come under international regulation, individual governmental control is diminished. These factors are currently playing out in the erratic prices of secondary commodities and the development of excess incinerator capacity in some nations that has brought about a rise in RDF exports from the UK and Italy. Governments, however, may make a virtue of the necessity of avoiding the minutiae: ecological policy is by definition long-term and requires a stable line; day to day control is an impossible and undesirable task.

The road to the third transition – towards a circular economy – requires a new mind-set from government that acknowledges and empowers individuals. Not only must we approach the issue from the bottom-up, but also from the side and above. Consumer behaviour must be steered by both ‘soft’ and ‘hard’ controls: through information and communication, because of the importance of psychological factors; but also through financial instruments, because both consumers and industry are clearly responsive to such stimuli.

Where we see opposition to deposit return schemes, it comes not from consumers but from industry, which fears the administrative and logistical burden. The business community must be convinced of the economic opportunities of innovation. Material supply chain management is a challenge for designers and producers, who nevertheless appreciate the benefits of product lifetime extensions and reuse. When attention to environmental risks seems to lapse – for example due to financial pressures or market failures – then politics must intervene.

Government and industry should therefore get a better grip on the under-developed positive drivers of the third transition, such as eco design, secondary materials policy, sustainable energy policy, and research and development in the areas of bio, info, and nanotechnologies. 

Third time’s the charm

Good supply chain management stands or falls with the way in which producers and consumers contribute to the policies supported by government and society. In order that producers and consumers make good on this responsibility, government must first support their environmental awareness.

The interpretation of municipal duty of care determines options for waste collection, disposal and processing. Also essential is the way in which producer responsibility takes shape, and the government must provide a clear separation of private and public duties. Businesses may be liable for the negative aspects of unbridled growth and irresponsible actions. It is also important for optimal interaction with the European legislators: a worthy entry in Brussels is valuable because of the international aspects of the third transition. Finally, supply chain management involves the use of various policy tools, including:

  • Rewarding good behaviour
  • Sharpening minimum standards
  • Development and certification of CO2 tools
  • Formulation and implementation of end-of-waste criteria
  • Remediation of waste incineration with low energy efficiency
  • Restoration or maintenance of a fair landfill tax
  • Application of the combustion load set at zero

‘Seeing is believing’ is the motto of followers of the Apostle Thomas, who is chiefly remembered for his propensity for doubt. The call for visible examples is heard ever louder as more questions are raised around the feasibility of product renewal and the possibilities of a circular economy.

Ultimately, the third transition is inevitable as we face a future of scarcity of raw materials and energy. However, while the direction is clear, the tools to be employed and the speed of change remain uncertain. Disasters are unnecessary to allow the realisation of vital changes; huge leaps forward are possible so long as government – both national and international – and society rigorously follow the preference order of the waste hierarchy. Climbing Lansink’s Ladder remains vital to attaining a perspective from which we might judge the ways in which to make a circle of our linear economy.

Note: The article is being republished with the permission of our collaborative partner Isonomia. The original article can be found at this link.

Circular Economy: Viewpoint of Plastic

plastic-bottle

Pieces of plastic have been trying to get our attention. The first scientific reports of plastic pollution in oceans were in the early 1970s. This waste plastic soaks up other pollutants at up to a million times the concentration in water, harming and killing sea life worldwide. From the point of view of the plastic, we have convincingly failed with solutions. Over the past 40 years the problem has grown around 100 times, with now over 8 million tonnes of plastic waste added to oceans per year.

Everyone is aware about ways for plastic to not become waste. We can set up redesign, sharing, refill, recycling and even composting. When it comes to creating practical possibilities for not making waste, people are super smart. But when it comes to making policy to install this practice throughout the economy, which has been the aim of circular economy for the past four decades, we’re consistently collectively stupid. I call this mob thinking.

We have intelligent activists, business people, experts and officials unintentionally thinking like a mob? always bringing forward the same decades old policy weapons. When these weapons don’t work there is a discussion about strategy but not any actual new strategy, just talk about how forcefully to use the same old policy weapons. This is how it’s been possible for waste management, waste regulation and the unsolved waste problem to all grow in tandem for so long.

If the piece of plastic had a voice in the circular economy debate what might it say? It would remind us to beware mob thinking. Today’s problems are solvable only by trying new thinking and new policy weapons. Precycling is an example. The piece of plastic doesn’t mind whether it’s part of a product that’s longlife or refilled or shared or refurbished or recycled or even composted (so long as it’s fully biodegradable). It doesn’t even mind being called ‘waste’ so long as it’s on its way to a new use. Action that ensures any of these is precycling.

Our piece of plastic does mind about ending up as ecosystem waste. It does not wish to join 5 trillion other pieces of plastic abandoned in the world’s oceans. It would be horrified to poison a fish or starve a sea bird. Equally it does not want to be perpetually entombed in a landfill dump or transformed into climate destabilising greenhouse gases by incineration.

The two possible outcomes for a piece of plastic, remaining as a resource or being dumped as ecological waste, are the same fates awaiting every product. Our economies and our futures depend on our ambition in arranging the right outcome. The old policy weapons of prescriptive targets and taxes, trying to force more of one waste management outcome or less of another, are largely obsolete. Circular economy can be fully and quickly implemented by policy to make markets financially responsible for the risk of products becoming ecological waste. Some ever hopeful pieces of plastic would be grateful if we would get on with doing this.

Reference: Governments Going Circular best practice case study of precycling premiums

Note: The original article is available at this link.

Waste Minimisation – Role of Public, Private and Community Sector

waste-minisationWhen it comes to waste minimisation and moving material up the waste hierarchy you will find partisan advocates for the roles of the public, private and community sectors. Each will tell you the reasons why their sector’s approach is the best. The private sector will extol their virtues as the only ones capable of efficiently and effectively doing the job.  They rightly note that they are the providers on the front lines who actually recover the vast majority of material, that the private sector approach drives innovation and efficiency, and that if waste minimisation is to be sustainable this must include economic sustainability.

The community sector on the other hand will make a strong case to say that their model, because it commonly encompasses social, environmental, and economic outcomes, is able to leverage value from recovered materials to dig deeper into the waste stream, to optimise recovered material quality, and to maximise employment and local economic benefit.

Before recycling and composting were economically viable prospects, community sector organisations led the way, developing many of the techniques now widely used. They remain the leaders in marginal areas such as furniture reuse, running projects that deliver environmental outcomes while providing wider community benefits such as rehabilitation and training for marginalised groups.

Finally, in the public sector corner, advocates will point out that the profit-driven private sector will only ever recover those materials that are able to generate positive revenues, and so cannot maximise waste minimisation, while social outcomes are strictly a secondary consideration. The community sector, on the other hand, while encompassing non-monetary values and capable of effective action on a local scale, is not set up to deliver these benefits on a larger scale and can sometimes struggle to deliver consistent, professional levels of service.

The public sector can point to government’s role in legislating to promote consistent environmental and social outcomes, while councils are major providers and commissioners of recycling services and instrumental in shaping public perceptions around waste issues. The public sector often leads in directing activity towards non-monetary but otherwise valuable outcomes, and provides the framework and funding for equity of service levels.

So who is right? Each sector has good arguments in its favour, and each has its weaknesses. Does one approach carry the day?  Should we just mix and match according to our personal taste or based on what is convenient?

Perhaps we are asking the wrong question. Maybe the issue is not “which approach is better?” but instead “how might the different models help us get to where we ultimately want to go?”

Smells Like Waste Minimisation

So where do we want to go?  What is the waste minimisation end game?

If we think about things from a zero waste perspective, the ideal is that we should move from linear processes of extraction, processing, consumption and disposal, to cyclical processes that mimic nature and that re-integrate materials into economic and natural systems.  This is the nirvana – where nothing is ‘thrown away’ because everything has a further beneficial use.  In other words what we have is not waste but resources.  Or to put it another way – everything has value.

Assuming that we continue to operate in an essentially capitalist system, value has to be translated into economic terms.  Imagine if every single thing that we now discard was worth enough money to motivate its recovery.  We would throw nothing away: why would we if there was money to be made from it?

So in a zero waste nirvana the private sector and the community sector would take care of recovery almost automatically.  There might evolve a community and private sector mix, with each occupying different niches depending on desired local outcomes. There would be no need for the public sector to intervene to promote waste minimisation.  All it would need to do would be to set some ground rules and monitor the industry to ensure a level playing field and appropriate health and safety.

Sectoral Healing

Returning to reality, we are a long way from that zero waste nirvana.  As things stand, a bunch of materials do have economic value, and are widely recycled. Another layer of materials have marginal value, and the remainder have no value in practical terms (or even a negative value in the case of hazardous wastes).

The suggested shift in perspective is most obvious in terms of how we think about the role of the public sector. To bring us closer to our goal, the public sector needs to intervene in the market to support those materials of marginal value so that they join the group that has genuine value.

Kerbside (or curbside) collection of certain materials, such as glass and lower value plastics, is an example of an activity that is in effect subsidised by public money. These subsidies enable the private sector to achieve environmental outcomes that we deem sufficiently worthwhile to fund.

However, the public sector should not just be plugging a gap in the market (as it largely does now), but be working towards largely doing itself out of a job. If we are to progress towards a cyclical economy, the role of the public sector should not be to subsidise marginal materials in perpetuity, but to progressively move them from marginal to genuinely economic, so that they no longer require support.

At the same time new materials would be progressively targeted and brought through so that the range and quantity requiring disposal constantly shrinks.  This suggests a vital role for the public sector that encompasses research, funding for development of new technologies and processes, and setting appropriate policy and price structures (such as through taxes, levies, or product stewardship programmes).

Similarly, the community sector, because it is able to ‘dig deeper’ into the waste stream, has a unique and ongoing role to play in terms of being able to more effectively address those materials of marginal value as they begin to move up the hierarchy.  The community sector’s unique value is its ability to work at the frontiers.

Meanwhile, the private sector’s resources and creativity will be needed to enable efficient systems to be developed to manage collection, processing and recycling of materials that reach the threshold of economic viability – and to create new, more sustainable products that fit more readily into a waste minimising world.

In the end, then, perhaps the answer is to stop seeing the three models as being in competition. Instead, we should consciously be utilising the unique characteristics of each so that we can evolve our practices towards a future that is more functional and capable of delivering the circular economy that must eventuate if we are to sustain ourselves on this planet.

Note: The article is being republished with the kind permission of our collaborative partner Isonomia. The original article can be viewed at this link