Too good to throw away: why the circular economy matters

A lot has happened this summer to focus our attention on the impact we humans are having on the planet. Many of us would like to see this focus used as a driver for change. The recently published 20 Predictions for the Next 20 Years campaign looks to what we can do to achieve a sustainable future.

Specifically, prediction 12 envisages a future where the current linear economic model, based on a “take-make-waste” mentality is replaced with a circular economy – a model where the value of all resources is extracted completely before they are reused, repurposed, dismantled or recycled. While some industries have made significant headway into this transition, according to the Circularity Gap Report, the global economy is only 9 percent circular today. Overall our current patterns of resource use are not sustainable and we are producing more waste than ever. Our current resource recovery policies and technologies are no longer fit for purpose, and this is affecting our health, our economy and the environment.

In large part the current system does not work because of the disproportional burden it places on individual consumers and households. A notion that waste is the product of individual consumer choices has persisted, that it is consumers who drive the demand for unsustainable products such as single use-plastics. What is left out of the narrative is the lack of agency consumers are provided in this demand creation. We are often not presented with a more sustainable choice, and if we are it is rarely the cheapest or most convenient option. Instead, most of the products we consume promote a particular kind of behavior, which ultimately involves producing waste. This is promoted in several ways from the single-use packaging of a chocolate bar to the planned obsolescence of expensive technology.

To stem the production of waste, we are encouraged as individuals to consume less, but this is undermined by the constant barrage of clever marketing enticing us to want the new, and get rid of the old. And so we are told to recycle to offset this. While we all can and should do our part, the process for recycling consumer products is inefficient and complex. Not only does it rely on us to know which coloured wheelie bin to use or to access specialised collection points, local municipalities are often not properly funded or equipped to gather, sort and reprocess waste. The consequence is that we are left with a lot that is not recycled.

The circular economy is about more than recycling; it presents a more holistic solution whereby economic growth and benefit is decoupled from the consumption of finite resources and the production of waste in the first place. The circular economy is about working with governments and businesses to help them suck every molecule of value from these finite resources.

Reuse rather than recycle or replace

Dr. Scott Valentine, KPMG circular economy specialist frames this through the journey of a glass jar.

A humble glass jar represents more than just a receptacle to hold pasta sauce or pickles. To make a glass jar, silica sand, soda ash, limestone and magnesium oxide are mined, transported and then heated to form glass, and specialised equipment is used to mold and shape that glass. This process represents a capital investment in all activities within the supply chain from mining, to processing, to retailing, as well as all the transportation and labour costs that are incurred along the way. In short, the true cost of our humbled glass is not just the cost of the materials that make the glass, it is a cumulative total of all the costs incurred along the supply chain.

When we recycle, we are crushing this investment along with the jar. This is why the best solution for dealing with used jars or any other manufactured object is to reuse, repair or retask when possible.

The World Business Council for Sustainable Development (WBCSD) has identified this value, and where some see waste, they see “value, opportunity and a business case to use resources for as long as they can last.” The WBCSD in conjunction with KPMG has recently launched a circular economy metrics approach. The Circular Transition Indicators process helps companies to transition to a more circular approach by allowing them to identify existing circular activities, setting targets for improvement, and quantifying the benefits of circular practices.

By reframing ‘waste’ as a resource that can be used to build business capital rather than reduce it, we can ultimately improve the way we use resources. If products are designed from the outset to be easily reused, repaired, remanufactured or dismantled and recycled, we will be well on our way to achieving a circular economy.

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