In an article for the World Economic Forum blog, Leo Schlesinger – CEO of MASISA México – makes the argument for the concept of a regenerative ‘circular economy’. This concept would basically embed sustainability firmly within society and effectively restore much of the life-supporting biosphere for our generation and future generations as well.
He advocates a shift from a linear – i.e. a so-called “take-make-dispose” view – to a regenerative ‘circular economy’ stating that the latter concept “aims to eradicate waste – not just from manufacturing processes, as lean management aspires to do, but systematically, throughout the life cycles and uses of products and their components.” ”In a circular economy,” Mr. Schlesinger elaborates, “the goal for durable components, such as metals and most plastics is to reuse or upgrade them for other productive applications through as many cycles as possible. (…) Ultimately, the circular economy could decouple economic growth from resource consumption.” Though his last ‘decoupling’ point seems a bit idealistic, he is right in pointing to the potential of maximizing the utilization of assets without – whenever possible and sensible – adding waste.
The concept of a ‘circular economy’ emanates from the simple understanding that projected future global demographics render current consumption patterns unsustainable in the long term. The World Economic Forum defines ‘circular economy’ in a report as follows:
“A circular economy is an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse and return to the biosphere, and aims for the elimination of waste through the superior design of materials, products, systems and business models.”
The following graphic shows such an economy based on those three core principles:
1. Waste does not exist: products are designed and optimized for a cycle of both disassembly and reuse thereby preserving large amounts of ‘already’ embedded energy and labor.
2. There is a strict differentiation between consumable and durable components of a product. Note, a decisive shift towards consumable products largely made of biological ingredients to ensure that they can safely be returned to the biosphere.
3. Reliance on renewable energy to power this cycle in order to decrease the dependency on natural resources while at the same time increasing the resilience of the entire system.
A Regenerative Circular Economy
Source: World Economic Forum
Even though the World Economic Forum report acknowledges the immense challenge of “[reconciling] the concept of scaling a circular economy within the reality of a global economy and complex multi-tier supply chains,” it still provides a good start because it looks at sustainability holistically in contrast to focusing on specific, isolated issues. Perhaps where the most and especially timely progress towards more sustainability is needed is ‘packaging’ as it relates to consumable products. In this respect, consumer awareness and demand will definitely serve as decisive drivers of change, but the onus to deliver has to be put first squarely on the consumer goods industry. Packaging should be entirely renewable. Non-renewable packaging thrown away is the biggest culprit for the floating mess depicted in the graphic below:
Source: Ocean Conservation Society with data from the National Oceanic and Atmospheric Association (NOAA) via Eco-Living Magazine on paperblog.com
Clearly, going down this path is not a sustainable option for our planet. Additionally, the World Economic Forum notes in its report that “eliminating waste from the industrial chain by reusing materials to the maximum extent possible promises production cost savings.” It cites, for example, the finding that “costs of packaging, processing and distributing beer could be reduced by 20% by shifting to reusable glass bottles.”
Finally, a sobering reminder of the innate complexity in a hyper-connected world nicely put by Leah Borromeo in the UK newspaper The Guardian:
“An unfortunate side effect with every sustainable or ethical business is that regardless of the altruism behind each recycled, upcycled, unpackaged or renewable product is that sustainability ultimately means the sustainability of profit, not planet.”
In order to fill this relatively abstract statement with ‘real life’, consider the following: Tapping precious and scarce US groundwater reservoirs in order to provide customers with the convenience of drinking bottled water – i.e. filled up in plastic containers – and that for a profit does relatively little in terms of sustainable water resource management given the groundwater reservoirs will be depleted over time with collateral damage all around. As a result, sustainability only appears on the balance sheets of companies in the form of profits. This is an area where the US Congress could actually spread its tentacles and delight its electorate with tighter regulation in the name of sustainability; above all, on behalf of the ecosystem as well as its citizens while at the same time indirectly preserving the opportunity for water companies to make a profit.
