Creating a real Circular Economy
By Mike Ritchie, Director, MRA Consulting Group
We are heading into a +1.5oC world. It is going to be awful.
We need to get our emissions, resource consumption and biodiversity house in order. Quickly.
This article focusses on the resource consumption part of the problem and specifically the creation of a more Circular Economy.
So what does a Circular Economy look like? Try this:
“In a circular future, we maximise the use of materials already in the economy and reduce reliance on virgin materials. We do this by designing for longevity, making smart material choices, emphasising repair, reuse and refilling opportunities and by establishing efficient recycling systems with robust end markets.
All levels of government commit to ‘upstream’ interventions including brave targets, multi-pronged circular policies, financial mechanisms and regulatory instruments.
Industry makes products to last, while consumers value and revalue products throughout their multiple lifecycles.
Recycling is part of a Circular Economy but a Circular Economy is much more than recycling.”
Masa Vahldieck MRA CE Manager 2023.
It is hard to disagree.
Such an approach demands that recycling be seen in its proper context. As an end-of-life solution when other (reuse, repurpose, repair) options have been exhausted.
A Circular Economy aspires to near 100% recovery of materials for productive reuse in the economy.
A Circular Economy aspires to maximum product life, maximum repair and reuse, moderate need for recycling and minimum landfill.
However, our current economic and regulatory framework is driving us the other way. The stats tell us so.
Unfortunately, we still landfill over 40% of the waste material generated by our economy because it is either cheaper or more convenient to do so. We generate 67 MT of waste and recycle 40 MT of it. Over 27 MT is landfilled.
A Circular Economy demands we get waste generation down by designing it out and recycling rates as a percentage, up (towards 100%).
Our current recycling target is 80% by 2030 and we have almost no chance of achieving it.
We need to immediately lift recycling rates (as an interim measure) while we build the policy incentives to reduce the generation of waste in the first place.
To the credit of most State Governments, they have lifted recycling rates from only 7% in 1997, to around 60% today through changes to regulations and market signals (mainly landfill levies).
But we need to go so much further. 100% is a long way away.
If we want to create a Circular Economy we need to walk and chew gum at the same time.
We need to put in place the CE policy framework and grow recycling at the same time.
It is not complicated. But it requires Will.
Will on the part of Governments to change those settings and Will on the part of voters to demand them.
So “Where are we at with creating a Circular Economy?” I hear you ask.
Mainly what we have from governments are “wish” statements- objectives and aims but not much actionable CE policy.
Never mind the things Masa is talking about – “Brave Targets, Circular Policies, Financial Mechanisms and Regulatory Instruments”.
As Masa and her team put it in a recent report (in consultant speak): “States and the Commonwealth are currently in the “Start Up” phase of their Circular Economy transition (based on a 4 step process: 1. Predevelopment, 2, Start Up, 3. Acceleration and 4. Stabilisation). Although they are aware of the importance of upstream interventions, few governments have shown commitment in their policy and funding commitments. Although there are “Grants” named as Circular Economy, the focus is still on the use of recycled material, i.e. on downstream solutions rather than on designing out waste, reuse, repair, reselling or on refurbishing.”
To put it in my language, there is not a single dedicated CE Act or Regulation in Australia. There are lots of goals and aspirations, targets and not much else. Most of our current reform relates to recycling. (Which is no bad thing while we still landfill 40% of material). But we must do better. Governments must do better.
There is not a single law in Australia that requires product developers to consider the end-of-life fate (reuse, recycling, landfill) of their products. Not one. That would be a good place to start.
Here are some examples of European actions to drive CE:
- EU –Minimum recycled content rules in construction and products, Packaging design standards, Mandated recyclability, Bans on non-recyclable products and Mandatory return systems.
- France – Bans on products, Mandated reuse requirements, Right to repair legislation and Repairability requirements.
- Scotland – Packaging fees for producers who make packaging that cannot be reused or recycled.
We need to rethink our regulations and market design to facilitate CE. To reduce waste generation in the first place, by designing it out.
Finally, we must move beyond Ministers simply opening new businesses that are branded (and rebranded) as CE initiatives. That is OK as far as it goes, but it is ridiculously inadequate. There is too much rebadging and greenwash in this space.
Of course, we should strongly support start-up CE businesses but this is not enough. As the wise Bard once said “One swallow does not a summer make”.
Don’t confuse one entrepreneur’s good idea with a market shift to a Circular Economy. The latter requires scale. Scalability is what separates the entrepreneurial business enterprise from the ‘economy’. We need both.
We need governments to get beyond the Circular Ecology rhetoric and to implement CE Action Plans that are real and achieve change, at scale.And we need to do so quickly, or our +1.5oC world, will become +2oC, or worse.
Mike Ritchie is the Managing Director at MRA Consulting Group.
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