Talks

Circular economy around the globe

 By Peter Ward

For long time, the world’s economy has been built around a model that sees humanity take resources, make what we need and then dispose of the leftovers. The concept of the circular economy aims to change that by building a system that promotes growth, zero waste and positive societal benefits…

Climate change and dwindling energy resources are two of the major concerns hanging over the existence of life as we know it. As the world evolves from using hydrocarbons to developing renewables as energy sources, priorities have shifted away from pure market forces to the actual self-preservation of the species; the circular economy is crucial to that change.

The main principles

The Ellen MacArthur Foundation described the circular economy as having three main principles:

 

  1. Design out waste & pollution
  2. Keep materials and products in highest value use
  3. Regenerate natural systems
circular-economy-around-globe
Dame Ellen Patricia MacArthur, founder of the Ellen MacArthur Foundation, a charity that works with business and education to accelerate the transition to a circular economy (Wikimedia).

The challenge is enormous, but so is the opportunity before us: to save the planet while at the same time creating a new, more inclusive economy along with a whole range of new businesses and jobs as yet unknown,” says Eni CEO Claudio Descalzi. “This will require generosity, commitment from all those concerned and a considerable change in mindset among more advanced nations.”
Certain nations are indeed leading the way in the push toward a circular economy, and it’s not just for environmental reasons. According to a 2015 European Commission report, a circular economy could bring net savings of close to $7 billion to European companies. Finland, which is looking to seize the advantage in this area, could provide $2.3 billion to $3.5 billion in added value, according to Sitra Studies.

Finland, Canada and beyond

In 2015, the Finnish government set a goal of becoming a leader in the global circular economy and adopted a roadmap to make it happen.
Canada is another country pushing the circular economy. In Ontario, in February, 2017, legislators agreed on a path toward a waste-free future. The Netherlands is considered one of the more advanced circular economy-thinkers. The country has set a goal of shifting to a circular system by the year 2050; it has targeted biomass and food, plastics, manufacturing, construction and consumer goods as five key areas it will tackle.
In 2016, the Scottish government developed a strategy to direct the country toward a more circular economy. The strategy had two key elements: to set up a single framework for all product types that drives the choice of reuse, repair and remanufacture; and to reduce all food waste by 33 percent by 2025. Scotland was also the first country to sign up to the Circular Economy 100, an Ellen MacArthur Foundation initiative.
Scotland’s government identified certain parts of the economy as more viable for transformation. The beer, whisky and fish industries could reduce costs by from approximately $6.5 million to $1 billion per year by taking a more circular approach, according to the government. And the remanufacture industry, which currently contributes $1.1 billion a year to the Scottish GDP, could be contributing $1.7 billion per year by 2020. The government also targeted improvements in the waste production of the construction and building environment, and more re-use of equipment in energy infrastructure.

Developing nations

While these countries are leading the way, it’s vital that the world doesn’t leave behind developing nations: as a matter of fact, their involvement in the EC models it is indeed crucial as their global energetic consumption is expected to double by 2040 while the OECD countries total consumption is expected to slightly decrease: as a result, non OECD countries will take a central role in the world’s circular economy scenario. Therefore, they will be able to provide a great contribution to the EC, emulating directly from the virtuous model systems already structured by the advanced nations.
“If we seriously want to face up to this issue, we cannot limit ourselves to thinking solely in terms of decisions affecting the developed world. The 35 OECD countries together account for only 17 percent of the world’s population, but produce 63 percent of global GDP,” says Descalzi. “The disparity is most evident in Africa, which sustains 17 percent of the world’s population but contributes only 3 percent to global GDP, despite the fact that it has more oil and gas reserves than the USA and enormous potential in terms of solar and wind-energy production.”
Eni has taken steps to embrace the circular economy by transforming its refinery and chemicals operations to focus on organic production and circularity. This will result in an extra $4.6 billion in spending by 2021, a host of new jobs and innovative forms of employment.

circular-economy-around-globe
Eni's refinery and chemicals operations as a result of focusing on organic production and circularity

Other companies have also joined the circular-economy push. Google is employing best practices to its data centers and on its campuses, while Unilever is taking steps to prevent plastics ending up in landfills.
The efforts to build a truly circular economy must be completely global if they are to succeed; the time has come for business leaders, politicians and everyone who cares about the planet to stand up and make a change.

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about the author
Peter Ward
Business and technology reporter based in New York. MA in Business Journalism at Columbia University Journalism School 2013. Five years experience reporting in the U.S., the U.K., and the Middle East.