The future of sustainability is circular

By Reinhardt Arp and Zaynab Sadan

The Anthropocene – or the age of humans – is underpinned by the pursuit of perpetual economic growth and characterised by environmental degradation on numerous fronts. According to conventional wisdom, economic growth is supposed to deliver prosperity, higher incomes and improved quality of life for all of us. However, this certainly isn’t the case in reality. Economic growth has, at best, delivered these benefits unequally and at the expense of the natural environment upon which economic growth itself depends. To continue on this business-as-usual pathway, paved with climate change, ecosystem degradation and biodiversity loss, is simply inconceivable.

The world is in desperate need of some kind of “green stimulus”, something that is increasingly being referred to as the ‘Green New Deal’ in the USA and the ‘Green Deal’ in Europe. We need a complete refurbishment of the global economy – one that creates jobs and improves livelihoods in the short-term; provides equitable food, energy, water and economic security in the medium-term; and crafts a sustainable future for all in the long-term. Transitioning to a just, low-carbon and circular economy provides a promising roadmap for building a sustainable macroeconomic policy and garnering such a green stimulus.

Refurbishing our economic model for circular sustainability

Since the industrial revolution the global economy has expanded exponentially, often at the cost of significant ecological resource degradation. In 2009 the planetary boundaries concept was proposed as a means of understanding and measuring our impact on the planet. Nine planetary boundaries define the environmental limits within which humanity can safely operate and provide science-based analyses of anthropogenic pressures on Earth’s ecological system.

Driven by uncensored consumerism, our continuing quest for economic growth has pushed four of Earth’s critical ecological processes beyond their safe planetary boundaries (Figure 1). According to the World Wide Fund for Nature (WWF) 2018 Living Planet Report, we have wiped out 60% of mammals, birds, fish and reptiles since 1970, and human activity is said to directly affect over 70% of global ice-free land surface. These pressures are pushing the integrity of our biosphere beyond its planetary boundary and into the high risk, red zone. Our fossil fuel addiction has increased global greenhouse gas (GHG) emissions by 41%3 over the last 30 years, pushing climate change beyond its safe planetary boundary. The global agricultural system, which, in its current form, fails to provide adequate nutrition for all and generates vast amounts of food waste, has pushed both the global land-system and biochemical flows beyond their planetary boundaries as well. Continued and unrestrained pressure on the planetary system from anthropogenic activities is dangerous and risks pushing the global system into uncharted territory.

The structure of the global economy needs a drastic refurbishment. Call it a green new deal, a just transition, a green stimulus, whatever we choose to call it, it needs to improve resource use efficiency, decouple material use from economic growth, promote sustainable production and consumption, address persistent inequities, and eliminate waste and pollution. To sum it up, it needs to deliver on both socio-economic and environmental agendas of the Sustainable Development Goals.

These green economic transitions are not to be confused as new, additional green sectors to those that already exist today. Rather, these are cross-cutting macroeconomic policy initiatives that take advantage of technological developments and seek to transition our existing economy to one that is more sustainable – a green metamorphosis if you will – and the circular economy model provides a promising concept from which to design such a green metamorphosis.

Figure 1: Planetary boundaries

From: Steffen, W., Richardson, K., Rockström, J., Cornell, S.E., Fetzer, I., Bennett, E.M., Biggs, R., Carpenter, S.R., de Vries, W., de Wit, C.A., Folke, C., Gerten, D., Heinke, J., Mace, G.M., Persson, L.M., Ramanathan, V., Reyers, B. AND Sörlin, S. 2015. Planetary boundaries: Guiding human development on a changing planet. Science, 347 (6223). DOI: 10.1126/science. 1259855. Reprinted with permission from AAAS.

The circular economy is a “framework for an economy that is restorative and regenerative by design”. This concept is rooted in the functioning of nature, which is itself built on a circular model. Plants take nutrients from the soil, energy from the sun and provide food for other animals. When they die, they decompose and replace those nutrients back into the soil. Despite having biological examples of regenerative, sustainable and circular systems, we have not yet replicated how nature functions into our systems. Instead we have embedded the take, make and dispose model within many, if not all, of our systems.

The circular economic model counters the current linear economy model and aims to limit the use of new resources and the amount of waste produced by the system, while accounting for all flows of materials within it. The circular economy achieves this by re-engineering or redesigning the system and its components so that waste is prevented/minimised/eliminated or can become a “secondary resources” or input. The expansion of a domestic secondary resource market has the benefit of reducing reliance on critical primary/virgin material inputs that are often imported and, therefore, can improve supply chain resilience to future climate disasters or geopolitical shocks.

A circular model also improves natural resource use efficiency, enhances the value of natural capital and avoids unnecessary waste and pollution. In doing so, the circular economy model reduces anthropogenic impacts on the environment and our planetary boundaries. Furthermore, secondary material use lowers the carbon intensity of the system and if (ideally) powered by renewable energy, the circular economy can help realise a low-carbon economy. In fact, according to an EMF study , transitioning to a circular economy is critical for achieving deep emissions reductions and transitioning to a low carbon economy.

In addition to environmental benefits, the circular economy carries several potential socio-economic benefits. The repurposing of waste into secondary resources can provide cost savings, create new markets for secondary resources and generate new job opportunities. According to an International Labour Organisation (ILO) report, 3 the circular economy model could create approximately 50 and 45 million jobs globally in the services and waste management sectors respectively . These benefits are derived from new activities born from redesigning the system and re-skilling workers from carbon intensive industries, which could provide a buffer against potential negative implications from the contraction of unsustainable or carbon-intensive activities.

Case study: Imagining a Circular Plastics Economy

The plastics sector provides a timely case study for illustrating the opportunities presented by the transition to a circular economy. Plastics are used across multiple industries and sectors, including packaging, fast moving consumer goods, textiles, the automotive industry, as well as building and construction. Plastic waste, however, is polluting terrestrial, freshwater and marine ecosystems in large volumes, which not only pose a threat to biodiversity, ecotourism and livelihoods in affected areas, but also induce knock-on effects on other distant geographical areas that depend on the well-being of the affected areas.

Under the current linear model, plastic products are primarily made from virgin, fossil fuel feedstocks, which accounts for 6% of global fossil fuel consumption 8 . Not all plastic products are designed to be reused by the consumer, particularly food and beverage packaging, and while some products are designed to be recycled, only a small percentage of plastics are actually recycled in practice. This is due to a number of reasons, including product design and the use of multi-layer materials and additives causing technical difficulties in recycling processes; economic and market structures; poor or limited waste collection, sorting and recycling infrastructure; and legislative barriers. As a result, this linear model has generated and leaked large volumes of plastic pollution in our natural environment.

This problem will only worsen if we fail to shift to a circular plastics economy. With a growing global population, there will be an increase in the demand and consumption of plastics. With current trends, the plastics sector is projected to account for 20% of global fossil fuels consumption by 2050, amounting to 15% of the global carbon budget.

A circular plastics economy (Figure 2) would be one that first and foremost limits the amount of virgin material entering the system by redesigning products to use less virgin material and more recycled material. It also encourages the use of more sustainable feedstocks, such as renewable plant based and waste material-based feedstocks rather than fossil fuel-based feedstocks. Redesigning products to be reused/refilled, and/or easily recycled and remanufactured into new products, will also reduce the generation of plastic waste and it’s leakage into the environment. An additional layer to these interventions could be to shift towards manufacturing and recycling system that uses renewable energy in order to decouple from fossil fuels entirely.

However, kick-starting the transition to a circular economic model will require a number of additional supporting interventions. Firstly, the circular economy needs to be institutionalised by establishing voluntary Extended Producer Responsibility (EPR) initiatives or through an enabling regulatory environment to ensure accountability among stakeholders throughout the plastics value chain. For example, primary plastic producers and packaging users (such as retailers and brand owners) should bear the bulk of the cost of end-of-life material management, brand-owners and retailers must redesign their products to be 100% recyclable and use as much recycled content as possible; consumers must take responsibility for reducing consumption, reusing and/or recycling their plastic, and waste collectors must ensure that all recyclable plastic finds its way back to recycling plants instead of landfill. If any of these stakeholders do not fulfil their role in the circular system then it is at risk of failure.

Interventions to achieve this include, amongst others: establishing a global agreement on plastics pollution and a circular plastics economy; promoting EPR schemes; introducing pricing mechanisms that increase the price competitiveness and creation of end-use markets for secondary resources (reused or recycled material) relative to virgin or primary resources; product standards and certification and the phasing out of unnecessary and problematic plastic products. The OECD RE-CIRCLE project provides guidance materials on a suit of interventions, regulations and policies for transitioning to a circular economy.

Figure 2: Interventions for a circular plastics economy

Source: WWF (2019)

Secondly, substantial investment into physical, digital and logistical network infrastructure is required to enable effective and efficient identification, collection, transportation, sorting and reuse/recycling of materials, such as take-back schemes, for example. This includes integrating informal waste pickers into the plastics economy as they play a critical role in the circular model, particularly in South Africa. Such investment needs to be low-carbon, relying on new technologies, such as renewable energy and electric vehicles. It also has the added benefit of providing a much needed stimulus to the economy, key being the job creation potential that comes with it.

Thirdly, capacity building, skills development, education and awareness are critical in activating digital, technological and logistics infrastructure within the circular economy model, from collection to remanufacturing. Policies, regulations and incentives are needed to encourage stakeholders along the value chain to build core competencies in circular and multi-life cycle design, including expertise required to redesign products and their components, rationalise materials, and create markets for secondary resource materials to stimulate circular material flow. Consumer awareness is also critical in promoting sustainable behaviour - from those who buy the product right up to the brand owner who packages the product.

Conclusion

We urgently need sustainable macroeconomic policy if we are to reduce our anthropogenic impact on the planet and ensure a sustainable future. The circular economy model provides us with a promising roadmap for developing sustainable macroeconomic policies and measures for transition to a just, sustainable and low-carbon economy. It not only improves resource use efficiency but also limits waste generation and pollution. Improving and expanding secondary resource supply and decoupling from primary resource requirements, the circular economy enhances supply chain resilience to unexpected climate or geopolitical shocks. Finally, the circular economy provides opportunities to address additional climate and socio-economic challenges, develop new skills and create jobs. This circular future is sustainable and the future of sustainability is circular.

Sources:

1. Steffen, W., Richardson, K., Rockström, J., Cornell, S.E., Fetzer, I., Bennett, E.M., Biggs, R., Carpenter, S.R., de Vries, W., de Wit, C.A., Folke, C., Gerten, D., Heinke, J., Mace, G.M., Persson, L.M., Ramanathan, V., Reyers, B. and Sörlin, S. 2015. Planetary boundaries: Guiding human development on a changing planet. Science, 347(6223): 736.

2. IPCC. 2019. Climate Change and Land: an IPCC special report on climate change, desertification, land degradation, sustainable land management, food security, and greenhouse gas fluxes in terrestrial ecosystems. Summary for Policymakers. [Online]. Available: https://www. ipcc.ch/site/assets/uploads/sites/4/2019/12/02_ Summary-for-Policymakers_SPM.pdf. Accessed 18 December 2019.

3. NOAA. 2019. NOAA’s greenhouse gas index up 41 percent since 1990. National Oceanic and Atmospheric Administration. [Online]. Available: https://research.noaa.gov/article/ArtMID/587/ ArticleID/2359/NOAA%E2%80%99s-greenhousegas-index-up-41-percent-since-1990. Accessed 26 November 2019

4. EMF. 2017. Concept: What is a circular economy? A framework for an economy that is restorative and regenerative by design. Ellen MacArthur Foundation. [Online]. Available: https:// www.ellenmacarthurfoundation.org/circulareconomy/concept. Accessed 18 December 2019.

5. McCarthy, A., Dellink, R. and Bibas, R. 2018. The Macroeconomics of the Circular Economy Transition: A Critical Review of Modelling Approaches. OECD Environment Working Papers, No. 130, OECD Publishing, Paris. [Online]. Available: https://doi.org/10.1787/ af983f9a-en. Accessed 17 December 2019.

6. EMF. 2019. Completing the picture: How the circular economy tackles climate change. Ellen MacArthur Foundation. [Online]. Available:https://www. ellenmacarthurfoundation.org/assets/downloads/ Completing_The_Picture_How_The_Circular_ Economy-_Tackles_Climate_Change_V3_26_ September.pdf. Accessed 17 December 2019.

7. ILO, 2018. World employment and social outlook 2018: Greening with jobs. International Labour Organisation. [Online]. Available: https://www.ilo. org/weso-greening/documents/WESO_Greening_ EN_web2.pdf. Accessed 15 January 2020.

8. WEF. 2016. The New Plastics Economy — Rethinking the future of plastics. World Economic Forum, Ellen MacArthur Foundation and McKinsey & Company. [Online]. Available: http:// www.ellenmacarthurfoundation.org/publications. Accessed 10 December 2019