The need for circular economy – the illuminating case of Norway

By | 2018-08-28T14:04:07+00:00 August 28th, 2018|

The world is close to reaching a tipping point of a multidimensional environmental crisis. As a recent study by Oxford University shows, we are well on our way towards a “hothouse earth” disaster scenario, where the Earth’s surface is 4-5 degrees hotter than today. Some of the tipping points for climate change, beyond which changes cannot be stopped, may already have been passed.

Our oceans are also in a perilous shape, as testified by these 25 ocean tipping points that we may be about to cross, according to the World Economic Forum. Freshwater scarcity is already affecting almost 3 billion people on the planet, expected to get much worse, even as plastic pollution has tipped past the point where it can be fixed by recycling alone. In fact, the majority of the nine planetary boundaries identified by the Stockholm Resilience Centre are flashing red and yellow, beyond the point of sustainability.

Indeed, the world just reached 1,000 GW of wind and solar renewable power capacity, and the G20 agreed on an action plan to reduce plastics in the oceans. Goal 6 of the UN’s Sustainable Development Goals (SDGs) promises to tackle the scarcity of clean water, and there is an alphabet soup of investor initiatives to promote sustainability.

But even the most ambitious of programmes do not reach anything like the scale and scope of concerted actions that are required to stop imminent environmental disaster. A problem highlighted in a soon to be published paper by BI and the Stockholm Centre is that our present strategy for meeting development SDGs can further damage the environment. A paradigm shift in our approach to the economy and environment is needed.

Fortunately, the concept of a circular approach to the economy that looks beyond our present take-make-waste model is starting to take hold. The circular economy is not about waste management, but something far more fundamental. It seeks to re-design products and services in a manner that seeks to eliminate waste altogether.

The need for this new approach becomes clear when we consider a few examples. Earth overshoot day, the day of the year that humanity has already consumed the year’s quota of sustainable resources has gone from December 19th in 1987 to August 1st in 2018. Unless we change tack, we will need the equivalent of 3 earths soon, up from 1.7 today.

Today, only 60% of the aluminium, which is easy and valuable to recycle, is actually recycled. But recycling possibilities for many alloys and plastic composites used are practically non-existent. Of the 8.3 billion tons of plastic the world has produced up until now, 6.3 billion tons has become waste. At this rate, by 2050 the oceans will contain more plastic than fish.

Over the past four decades, our use of materials including sand, gravel, metals, biomass and fuels has more than trebled from 27 billion tonnes to more than 85 billion tonnes now. Given that 2/3 of all greenhouse gas emissions come from materials management, a circular approach to the economy is also the only way of simultaneously tacking the problems of climate change, water shortage, air, land and ocean pollution and resource depletion.

A circular approach to the economy that designs products to eliminate waste, uses renewable sources of energy, adopts business models such as the sharing economy and offers take-back schemes for consumer durables, is the only hope we have of tacking the looming environmental crisis. An early mover advantage will bring great long-term economic and social benefits to the economies that shift their approach to circular economy soon, creating lucrative opportunities.

So far, less than 10% of the economy follows this circular approach, so the business opportunities are huge. The consultancy McKinsey has estimated that there are more than $1 trillion of circular opportunities for businesses by 2025, and Accenture expects that the circular economy can add $4.5 trillion to the global economy by 2030. The companies and governments with the greatest circular economy know-how will be able to capitalise most on the inevitable shift to more circular approaches, especially with more pressures for sustainability from future generations that have a bigger stake in the planet.

Norway is a world-renowned leader in waste management, with organisations such as Infinitum, its world-renowned deposit-based recycling scheme for plastic bottles, and it’s system for reusing 85% of all waste electrical and electronic equipment.

Despite this, Norway remains a latecomer to a more holistic circular approach to the economy. However, now that Circular Norway has launched, there is a way to quickly catch up. With close co-operation between businesses and the government that Norway is known for, we can even get ahead of the Netherlands, Finland and Denmark, who have the lead. “Unlimited opportunities in the circular economy”, the title of an event hosted by Research Council of Norway, Innovation Norway and the EEA and Norway Grants, rings very true.

Sony Kapoor is Director of Re-Define, the International Think Tank

A version of this article was originally published in the Norwegian daily newspaper Aftenposten on the 23rd of August 2018, and can be accessed here.

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