The circular economy is becoming mainstream
By Mike Ritchie – Managing Director, MRA Consulting Group
The idea of waste as a resource is not a new one. It’s an idea that has been around for years, decades even, but it’s an idea that has struggled to get onto the mainstream agenda. Putting materials out for recycling is well accepted; reincorporating those materials into the productive economy has languished. Designing products so that, at the end of their life, their materials can be reincorporated into new products is even less common.
The notion of a circular economy was perhaps most famously articulated by the “cradle to cradle” thinking of William McDonough and Michael Braungart. It is an idea that has gained momentum with the work of the Ellen MacArthur Foundation, with the Foundation developing “Project MainStream” in conjunction with the World Economic Forum and McKinsey & Company.
The stated aim of Project MainStream is to deal with global material flows. To look at “systemic stalemates that are too big or too complex for an individual business, city or government to overcome alone”. It’s a big aim, and one that is rightly nestled within the World Economic Forum. An aim that needs the assistance of significant business players; and so Project MainStream is led by the chief executive officers of nine global companies: Averda, BT, Tarkett, Royal DSM, Ecolab, Indorama Ventures, Philips, SUEZ and Veolia.
Having launched in 2014, Project MainStream has already tackled three distinct initiatives.
The first is to look at how to extract more recycled cellulose fibre to meet growing demand, plugging leakage points and improving fibre quality. Extracting more fibre ultimately boils down to a series of global eco-design rules for paper products, rules that can then be translated into local regulation.
Project MainStream has looked at Intelligent Assets; the rapidly growing ecosystem of connected devices that could decouple resource consumption from value creation. The so-called “Internet of Things” (IoT) could create a world where resources are made to work harder. It is potentially a trillion dollar opportunity for those who are able to develop new business models around the intelligence gathered from 20-50 billion devices expected to be connected by 2020 (up from 10 billion in 2016). Incorporating circular economy principles seems an obvious way to tap into this value, and the Internet of Things will be a powerful enabler of the circular economy.
And finally, Project MainStream has looked at The New Plastics Economy, and specifically how to transition plastic packaging into the circular economy. The impacts on the environment from plastics are substantial. About 95% of the value of plastic is lost to the economy after a single use, representing $80-120 billion lost annually. The solution to these challenges lies in developing robust end markets. And building robust end markets requires a “concerted, global, systemic and collaborative initiative”, referred to by Project MainStream as a Global Plastics Protocol. A protocol considering questions like how to design waste systems that are not fragmented at a local or regional level. That are designed to achieve optimal scale and economics.
The future is circular
Paper. Plastics. Intelligent Assets. Discussions around the circular economy are creating the future. A future where resources come from waste, where waste materials become feedstock for regenerative economies. A future of green collar jobs, of a densely integrated system of remanufacturing that sustains local industry.
We are held back from this future because recycling costs more money than cheap landfill disposal. It is clear that we must reverse this situation to sustain a circular economy locally. And we do it by making recycling more financially compelling, by ensuring that landfill is properly priced to cover all of the real externalities and scarcity (of landfill sites and resources).
We must work to create low cost recycling systems (product design, dismantling etc.), better and higher value product reuse (design for recovery and reuse), and higher valued uses of recyclables (including for fibre, plastic, batteries, metals, glass, e-waste and energy). And we must address landfill pricing through policy, as NSW has been doing and as SA has committed to do.
At MRA Consulting, we are deeply involved in making the circular economy happen. We are working with waste technology and service providers to redesign collection and processing systems so that they integrate with deepening global markets. With local policymakers to ensure that Australia participates in the growing circular economy. Keeping abreast of the opportunities that are rapidly emerging.
The collaboration between the Ellen MacArthur Foundation, the World Economic Forum and McKinsey & Company to guide Project MainStream is worth watching closely.
If you would like to know more about the work we are doing and how you can get involved, please get in touch at [email protected].
As always, I welcome your feedback on this, or any other topic on ‘The Tipping Point’.
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