Circular economy in materials needed for sustainable growth

Short-term profit-chasing has led the economy to face a chronic overuse of finite resources. The unsustainability of the current economic model has seen global businesses and governments consider more efficient forms of material utilisation, with circular economic models touted as a potential game changer. The system continues to allow customers to acquire key goods while promoting more efficient usage of materials. Simultaneously, an increase in focus on services that require lower levels of resources also offer additional opportunities for sustainable growth.

The increasing scarcity of many resources, is finally beginning to prompt action from economists, business leaders, governments and some consumers. The fundamental structure of the present economy, which tends to focus on the bottom line and profit above all else, is increasingly leading to environmental and economic uncertainty.

Warnings about the lack of longevity of current economic models have been made for some time now even while profit interests have held off change and transformation. Concerns, related in particular to climate change and other forms of waste such as plastic and environmental toxins, have prompted governments, consumers, and increasingly the business community itself to push forward change.

In recent years various economists and business leaders have begun to realise the need to change to mitigate the negative externalities of their business practices on the environment. One way forward in which consumption can continue in part, but through which the negative externalities are reduced or even eliminated, is through circular economic principles.

In contrast to a cradle-to-the-grave economic model, a circular economic model is, according to the Ellen MacArthur Foundation’s influential 2012 report 'Towards the Circular Economy', “... 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 aims for the elimination of waste through the superior design of materials, products, systems, and, within this, business models.“

In a new report from Ecofys, now a Navigant company, titled ‘Circular Economy’, the potential benefits of a circular economy are considered. The report was commissioned by WBCSD, which is a CEO-led organisation comprising of over 200 leading businesses, with total revenues in excess of $8.5 trillion. While this report considers the effect that a circular economic model can have on the materials industry, another report released last year by Ecofys considers the impact of a circular economy on climate.

Materials

The study focused primarily on the use of metal ores, plastics, cement, glass, and biomass – including wood primary crops and cattle. The consulting firm modelled various key footprints of the various materials, to identify the effect of circular economic principles on their utilisation. The modelling included the supply chain of the extraction of the various materials.

In support of previous projections that circular economics could help meet sustainability targets, the study found that the total carbon footprint of the various materials studied stood at 7,538 MtCO2e, or around 20% of the global total emissions. The largest contributing segments were found to be cement (30%), cattle (26%), steel (23%) and primary crops (14%). The large contribution from cement and steel stemmed from their high energy requirement respectively, while the presence of cattle farming in the list was largely the result of methane emissions.

The materials also showed different impacts on two other externalities, water use and land use. In terms of water use, the eight materials contribute 95% of the global blue water footprint according to the study. Amongst these materials, primary crops used the highest amount by far, consuming 91% of the amount used by all eight materials.

In terms of contribution to land footprints, which create various negative externalities, from deforestation to desertification, wood, primary crops and cattle are the largest contributors from the various material considered.

In terms of mitigating the use of water, the study highlights various circular economic moves that can be made, including the reduction of food loss throughout the supply and consumption chains. Reducing food waste is also on the cards for reducing land-use, according to the study.

The study suggests various methods of reducing, reusing and recycling the various materials considered in the study. Substitution of meat for more environmentally friendly food products helps to reduce waste production, while reducing food waste and improving supply chains improves efficiency. Increased focus on materials with a lower environmental impact in various aspects of the supply chain for construction and goods improves initial impact and provides additional gains through improvements in product quality.

These improvements include a focus on longevity as well as the possibility for refurbishment and upgrades, which reduces the need for replacement – planned obsolescence is largely in contradiction to a circular economy, as are items of marginal quality. Consumption itself, as a principle, is also not in line with a circular economy as long-term ownership, including maintenance and respect, are necessary at the customer level.