Paving the Way for a Circular Economy

By Averill Brewer

There is a morbid depiction of human life floating around the Internet that reads something like: “Join a hilarious adventure of a lifetime! Work. Buy. Consume. Die.” Although this is a pretty robotic portrayal of modern human existence, and quite obviously does not account for the aspects of life that inspire pleasure and hopefulness and creativity, it is a useful picture in understanding our current system of consumption — the linear economy.

One of the best definitions of a linear economy is provided by the Ellen MacArthur Foundation, which also defines the antithesis of a linear economy, the circular economy. According the foundation, today’s “linear take, make, dispose economic model relies on large quantities of cheap, easily accessible materials and energy." Our current linear economy is one that has reached a tipping point, due its reliance on finite materials and “throw-away” methods combined with exponential population growth and the resulting consumption rates. The bubble will burst.

The hero of our story -- its concept still fairly young -- is called the circular economy. The circular economy resolves the negative consequences of our current system by providing a framework that creates an economy which is “restorative and regenerative by design, and aims to keep products, components and materials at their highest utility and value at all times.”  All waste materials are recycled in or composted never reaching a grave.

There is no need vilify sudden uncomfortable changes. Nobody wants to be left behind because regulators and public policies inhibited them from “keeping up”, whether it is technological change or transforming into the circular economy. We must remember that as stakeholders, we have the unique ability to create the strong pull needed to incentivize our institutions and businesses to make decisions that are tied to circular economy principles. It is our compassion and stewardship qualities that differentiate us from robots—qualities that during times of rapid change we must be careful to nurture and use to our advantage to create a more sustainable world.

In January, the world’s leaders in economics, business and government met at the annual World Economic Forum (WEF) in Davos, Switzerland. The theme this year was the "fourth industrial revolution," meaning the global, exponential pace of transformation in entire systems of production, management and governance due increasing digitization, automation and artificial intelligence on a massive scale. Jobs will be lost because of this technological revolution, as was the case with all previous industrial revolutions. Humans will continue to adapt and to conceive new relationships with technology.

Nicholas Davis, head of society and innovation at the WEF, said: "It shouldn’t be too shocking that two Oxford researchers, Carl Benedikt Frey and Michael A Osborne, estimated that 47 percent of U.S. jobs are at high risk from the changes underway in digitization and automation.”

Of course, it is too soon to frantically speculate about the consequences of the fourth industrial revolution. It is also perhaps alarmist behavior to assume, even if automation and robots take over a large quantity of monotonous jobs, that there will not also be jobs created to compliment new technologies we can’t even image yet. For a very simple example: The plane was created and then the pilot was needed.

Without the transformation of our current linear economy into a circular economy, there is no way to root real progress in sustainable development. Government policies and incentives have begun to create the “push” needed for this transformation, Jean-Louis Chaussade of Suez Environment said during a briefing at the Davos Conference. However, it is up to stakeholders to create a strong pull and demand for companies to utilize circular-economy principles. In Chaussade’s industry, such a pull might look like stakeholders who are demanding that manufacturers use the available technology to produce “second-hand/recycled plastics” versus their current production of virgin plastic derived from fossil fuels. A strong pull and demand from consumers is necessary in order to compete with the $30/barrel oil prices.

In December 2015, the EU Commission adopted the Circular Economy Package, signaling that European bureaucracy views the circular economy as the vehicle the European Union needs in order to help businesses and consumers move forward while using resources in more sustainable way. The objective of the Circular Economy Package is that along with creating substantial environmental benefits, a growing circular economy will offer the “potential to create jobs, differentiating itself from other industrial revolutions” because the circular economy will use more labor and fewer resources to “increase efficiency in economic activity.” The main sectors of the circular economy, which the European Commission has identified as potentially contributing to job creation in the future, include the repair, waste and recycling, rental & leasing sectors.

The report projects circular-economy activities to create at least 3.4 million jobs across Europe: 1.2 million in repair of machinery; 400,000 in repair of computers and household goods; 700,000 in waste collection, treatment and disposal, etc. Researchers warn that the technological revolution can potentially disrupt these projections due to the uncertainty of what automated systems will be able to replace.

If the unknown potential of the fourth industrial revolution is what makes it exciting... then the tangible and measurable goals of the Circular Economy Package are what create a responsible path for the future. The Circular Economy Package “gives a signal to economic operators that the EU is using all the tools available to transform the economy, opening the way to new business opportunities and boosting competitiveness” in addition to creating jobs and generating sustainable growth.

Image: Public domain

Averill Brewer is a writer currently living in England. This autumn she completed her master's of international business with a focus in sustainable development. You can email her at averill.brewer@gmail.com