Circular Asia News - Issue 14
What is the Circular Economy?
By now, you would think it is settled, but not so fast. In a recent publication, two researchers, Trevor Zink and Thomas?Siderius, state "The circular economy stands at a crossroads between true systemic change and rebranded business-as-usual."
Over the last few years, many academics and researchers have taken the circular economy to task. And so they should; we need rigorous debate and scrutiny in order for the circular economy to evolve. In addition, there are some circular economy practitioners who only support the Circular Rs, and others who want the circular economy to include social elements, such as human rights, gender equality and diversity. How do we understand the circular economy and where may we be going wrong as circular greenwashing is on the rise? But, first, a trip down memory lane.
A Brief History of the Circular Economy
The scientific field of Industrial Ecology began to take shape at the end of the 1980s. Its new idea was an integral view of material flows used in industrial processes. Influenced by the principles of the natural ecosystem, the goal is to use waste streams of one industrial process as input material for other processes, minimizing the losses of substances to the environment.
The diagram above is the foundation of the circular economy; however, this image was published by Hardin Tibbs in the paper ‘Industrial Ecology - An Environmental Agenda for Industry’ in 1993.
Hardin Tibbs writes, "At the moment, the industrial 'system' is less a system than a collection of linear flows - drawing materials and fossil energy from nature, processing them for economic value, and dumping the residue back into nature. This ‘extract and dump’ pattern is at the root of our current environmental difficulties. The natural environment works very differently. From its early non-cyclic origins, it has evolved into a truly cyclic system, endlessly circulating and transforming materials and managing to run almost entirely on ambient solar energy.?
There is no reason why the international economy could not be reframed along these lines as a continuous cyclic flow of materials requiring a significantly lower level of energy input and a vastly lower level of raw materials input from and waste output to the natural environment. Such a 'cyclic economy' would not be limited in terms of the economic activity and growth it could generate, but it would be limited in terms of the input of new materials and energy it required."
So, What Happened Next?
On the 23 June 2009, the Ellen MacArthur Foundation (EMF) was registered and publicly launched on 2 September 2010 by MacArthur at the?London Science Museum. The EMF can be credited with moving the concept of the cyclic economy from academia to the more mainstream version of the circular economy. Within a very short time, the Butterfly diagram appeared as a way to communicate, "WTF is the circular economy?" Yet it was this visual representation that enabled the circular economy to become popular.
All of a sudden, here was this new kid on the block, the wonderful salvation to our planetary ills. It did not matter if the Butterfly diagram was workable, if anyone actually understood it or what it meant. The Butterfly diagram was everywhere. It was a way to communicate that you were a member of the club.
However, the question is, did the Butterfly diagram communicate enough? It conveyed a hierarchy of functions around product-use-cycle-extension and a regenerative system, but in my estimation, it failed to communicate the essence of the circular economy - resource management and energy efficiency.
Circular Economy Greenwashing
Circular economy greenwashing is on the rise. Many people have hijacked the circular economy by believing that simply having a clothing or electronic rental business or repurposing items is the circular economy. Being innovative through the creative use of end-of-use-cycle products is not the same as resource management. These so called circular businesses provide little acknowledgement that the products we buy are made from primary raw materials and should be returned for reprocessing into a secondary raw material.
The visual representation in the form of the Butterfly diagram has also failed to connect the circular economy with sustainable development. Therefore it is easy for many companies who wish to promote their green credentials to exploit the circular economy according to their interpretation. And, to be fair, a reasonable number of circular economy organisations and professionals neglected to reign in this interpretation.
Some would argue that the infrastructure (collection) does not exist for a true circular system to evolve. For example, the economical reprocessing of, say, clothing items are simply too complex, with zippers, buttons, labels, and the large variety of different fabrics. Unless we start to build these systems, where we can accurately measure the volumes of textiles that can be reprocessed, and calculate the economics, we shall never manage our resources. Of course, there is risk when it comes to pioneering new approaches to our linear economy. However, we cannot remain idle for too much longer while we wait until a future time when these circular systems are established.
The Circular Economy Debate
In the last two weeks, I had the pleasure of reading 'Markets and?the?Future of?the?Circular Economy' by Trevor Zink and Thomas?Siderius. The opening paragraph gives the reader an indication of where the paper is heading. "One of the authors of this paper was recently working with a major public sector organization to realize, accelerate, and scale up existing knowledge on circular economy practices in order to achieve systemic change. Interestingly, despite beginning with functional questions such as 'how can we design an ecologically and socially sound solution?', the practical starting point of the discussion quickly became: 'What is the business case for this project?' Despite the participants' noble intentions, this setup was immediately destined to fail to reach the goal of systemic change. As we will argue, starting with the necessity for a business case inevitably leads to solutions within the system rather than solutions that change the system."
The authors have also developed their own visual representation of the circular economy for easy cognitive access.
The Functional Circular Economy (image below)
The Circular Economy as a System of Markets (image below)
Are these two diagrams closer to communicating the circular economy that reduces the growth of circular greenwashing and conveys the value of establishing the systems required to manage our resources? Or do these diagrams continue the debate regarding what is the circular economy? To understand a Functional Circular Economy you need to read the paper. How many people will do so? It may be easier to skip to the 2nd diagram as this takes you back to familiar territory and a comfort zone of the Butterfly diagram.
However, it is a closer visual representation of the circular economy as there are clear links to materials, components and markets. The one glaring error is in calling end-of-use-cycle products as 'scrap'. It continues the negative emotion associated with end-of-use-cycle products. Managing our resources requires engagement from three stakeholder groups (not necessarily in this order):
Here is my visual representation of the circular economy. While it is quite rudimentary, it attempts to bring into cognitive consciousness the key elements, I believe, we need all the stakeholders to accept. There are no loops or hierarchies of functions.
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The Circular Rs will Struggle to Manage Resources at Scale
In the whole history of the human race, we have never managed the primary raw materials we use in our daily lives. We are living far beyond our planetary boundaries and yet we still believe there is an abundance of resources to extract.
Waste-to-Energy: According to Ecoprog.com, as of 2021, there are currently approximately 2,500 waste-to-energy (WtE) facilities with another 1,000 planned projects worldwide. The waste-to-energy (WtE) market is expected to register a CAGR of 7.35% during the forecast period of 2021 - 2026, reaching a market size of US$69.94 billion by 2026, up from US$43.66 billion in 2019.?
The market growth is expected to be restrained by the expensive nature of incinerators, particularly as energy prices decline and several plants are unable to cover operating costs. Furthermore, several European and Asia-Pacific countries are planning to focus more on recycling, which saves three to five times more energy, thus, restraining the waste-to-energy market.
We are burning secondary raw materials at an ever-increasing rate because we call it waste or scrap. And we have not yet learnt to value the resources that make our lives livable.
Repair: The repair and maintenance market consists of sales of repair and maintenance services by entities (organizations, sole traders and partnerships) that provide repair and maintenance services for automotive, personal goods, electronics and other products but excluding aerospace and defence equipment.
The global repair and maintenance market size is expected to grow from US$1280.72 billion in 2021 and is expected to reach US$2066.72 billion in 2026 at a CAGR of 9.8%. The repair market is very small in comparision to the overall value of all the products on the market.
Refill and Reusable Packaging: Refillable and reusable packaging sales are projected at $42 billion in 2022 and are forecast to grow 4.9% annually to 2027 with a market value of $53.4 billion. Global refillable and reusable packaging sales represent approximately 4% of global packaging sales in 2021.?
Remanufacturing: Automotive - the global Automotive Parts Remanufacturing market size is estimated to be worth US$22290 million in 2022 and is forecast to a readjusted size of US$43760 million by 2028 with a CAGR of 11.9% during the forecast period 2022-2028.
Mining - The global mining remanufacturing components market attained a value of US$4 billion in 2020. The industry is further expected to grow in the forecast period of 2022-2027 at a CAGR of 3.2% to reach US$4.8 billion by 2026. The growth of mining activities, especially in developing countries and the increased demand for resource exploration, have a positive impact on the remanufacturing components market. Factors like lower costs of remanufacturing mining components compared with new parts are driving the growth of the industry.
Medical devices - The?medical device remanufacturing market?is projected to reach US$3.9 billion by 2027 from US$2.0 billion in 2022, at a CAGR of 13.7% during the forecast period. Growth in the market is mainly driven by the favorable regulatory standards for adoption of reprocessed medical devices by healthcare providers.
Just to put the value of remanufacturing of medical devices into perspective, the global medical devices market is projected to grow from $495.46 billion in 2022 to $718.92 billion by 2029 at a CAGR of 5.5% in forecast period, 2022-2029.
What the Future Looks Like
It is highly unlikely the chemical and plastics industry is out to pollute the land and oceans. It is also highly unlikely the plastics industry will reduce plastics production. As we continue to mismanage our primary raw materials plastics will begin to take the place of metals.
Conclusion
The single most useful way of communicating the circular economy is via an easy-to-understand visual representation. The Butterfly diagram is not specific enough to combat the rise in circular greenwashing. Nor are the various incarnations that have sprouted as they all focus on the Circular Rs. In turn, there appears to be no correlation to sustainable development.
To achieve any progress at all on any of our environmental or sustainability goals, we shall require a range of different levers for business and consumer engagement. The Circular Rs have a place, but should not considered the Circular Economy. There is an urgent need for a deeper, more comprehensive meaning to the circular economy - resource management and resource efficiency that pushes the boundaries for greater systematic change. We underestimate the power of visual communication. Any new visual representation of the circular economy should include resources as a fundamental cornerstone from which we base our values.
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Ms Adrienna Zsakay is CEO of?Circular Economy Asia Inc,?and this article represents her opinions on the circular economy.
References
Wikipedia - Ellen MacAthur
'Preventing Greenwashing in the Circular Economy - Reflections on the Role of ISO Standards' by Dr Sigurd Sagen Vildasen, 4 December, 2020
'Markets and?the?Future of?the?Circular Economy' by Trevor Zink and Thomas?Siderius, published in the Circular Economy and Sustainability Journal, Springer, 2022
'Waste to Energy 2021/2022' from Ecoprog.com
'Waste-to-Energy (WtE) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)' from Research and Markets, dated December 2021
'Repair And Maintenance Global Market Report 2022 – By Type ?Market Size, Trends, And Global Forecast 2022-2026' from The Business Research Company
'The Future of Refillable & Reusable Packaging to 2027' Smithers, dated 18 July 2022
?'Automotive Parts Remanufacturing Market' from Market Watch, dated 12 September 2022
'Global Mining Remanufacturing Components Market Outlook' from Expert Market Research.
'Medical Device Reprocessing Market by Type - Global Forecast to 2027' from Markets and Markets.
'Medical Devices Market Size' from Fortune Business Insights
Sustainability Professional
2 年Annie Jiang