Towards a circular resource policy

Though it dates from 1979, the waste hierarchy remains an essential route map for the transition to the circular economy. In the seventies, when I developed the hierarchy (first known as Lansink’s Ladder), the historical context was the Club of Rome’s highlighting impending raw material scarcity, and two consecutive energy crises in the West. In our current context, material scarcity and increasing demands on energy still shape the geopolitical agenda, due to the intimate connection between energy policy, the circular economy and – of course – climate change, the greatest global threat of our times.

Increasing economic circularity significantly contributes to the reduction of CO₂ emissions, through savings in the energy content of materials and products. A 2018 report from SITRA found that if 100% recycling could be achieved for indispensable materials such as aluminum, glass, concrete and even plastic by 2050, the associated CO₂ emissions could be reduced by about 50%.

Therefore, to develop a firm resource policy we need to start thinking in terms of a resource hierarchy. This will require inclusive system thinking, whereby everyone involved in the value chain cooperates and plans together to overcome the challenges of transitioning to a circular model.

Conditional logic

Adapting the preference order of the waste hierarchy to a circular economy approach  includes designing for recycling, stimulating urban mining, creating consumer awareness, encouraging supply chain management and making waste management a part of broader climate policy. However, grounding these adaptions, there are several preconditions for a successful transition to a circular economy:

• Having achievable aims, based on a long-term vision;
• Having useful and available means to achieve these aims;
• Respect for nature and natural laws;
• Understanding value and value chains;
• The presence of, and cooperation between, loyal chain partners; and
• Broad and enduring support from society.

Regarding the first of these preconditions, the objective in moving towards a circular economy is to close the loops in product and/or material chains as much as possible, within a certain period of time. A ten-year timeframe is generally appropriate, but for complicated changes, for long lifecycle products like buildings, or in the context of less developed countries, longer periods may be necessary.

A high recycling rate is good, but not sufficient; what is done with recovered material flows is of greater importance. The built-in value of high-quality materials or usable energy must be retained or even added to. Moreover, optimising the reuse of materials requires not just high yields, but also sufficient secondary material quality.

However, closing all cycles completely is no more conceivable than completely closing particularly difficult loops and the transition process is helped by realistic aims and estimates of the time needed to achieve them. A 100% waste-free future is a nice ideal, but not realistically achievable – at least not for the foreseeable future and in every part of the world.

Means test

Moving from a waste to resource hierarchy requires new policy instruments with which to target the upper tiers of the hierarchy: prevention, reuse, and recycling. Examples include lower taxes for repair and maintenance in order to extend the lifetimes of expensive and sustainable products, and certification protocols and (especially in the construction sector) material passports. Old, counterproductive means and instruments, such as high VAT on services for lifetime extension of products and buildings, must be eliminated.

The preference order stimulates innovation on and between each rung and forms the basis for ecodesign and resource management. However, despite the available knowledge and technologies, a lot of work must be done in almost all related domains of circular economy, including design for reuse and recycling, new materials and products, development of management tools, improving logistics and last but not least understanding societal needs. Consumer participation must also be modernised with new communications tools and platforms for consumer enquiries, and through optimising chain management. Legislative instruments, including both standards and financial policies, also deserve special attention. Decisions also need to be made on environmental taxes, particularly carbon taxes – maybe at an international level.

Since a circular economy will almost inevitably have an international dimension, legislative action at the level of individual nations may not be sufficient: policy co-operation is necessary, at the European level if not more widely. Moreover, in the context of climate action inclusive thinking also means that future agreements on climate change after COP21 must include aims and proposals for a circular economy.

Knowing your limits

Sometimes we are given the impression that there are no limits to what science and technology can achieve. However, transitioning to a circular economy requires time, perseverance, and knowledge of the laws of thermodynamics. Closing cycles costs a lot of energy, proportional to the quantity of matter in the chain.

Closing cycles is a necessary condition for sustainability, but is not sufficient to produce real circularity. Recognising the limits placed upon our economies by natural laws allows us to see that the concept of ‘green growth’ is necessarily somewhat paradoxical – a product of wishful thinking. The paradigm of a never-ending turnover, as found in the Cradle to Cradle concept, ignores natural laws. We must decouple economic growth from resource use so far as possible – and ensure societal support for this transition. However, limiting volumes of production and consumption, though difficult, remains a fundamental step.

Time and place are important factors in value creation. The value of products and materials fluctuates and while recovered items typically have lower value than new or virgin ones, this is not always the case. The location of value retention and creation also plays an important role, from the place of extraction of primary raw materials to the places of production, consumption, recycling and reuse. A circular economy must go beyond traditional waste policy in recognising these factors and responding with technological, organisational and social innovations.

Circles of influence

As originally explored by Saeed Parto – and later developed in my book Challenging Changes – transitioning will involve behavioral, cognitive, associative, regulatory and constitutive aspects. Although businesses may prefer ‘Green Deal’ style voluntary arrangements to legislation, the goal must be to compel government and resource chain partners into fair cooperation, so that they can play their role as catalysts for the development of a circular economy, without wishful thinking and towards achievable aims.

Extended producer responsibility laws, for example, place a new onus on resource chain partners to pave the road to greater circularity. To avoid free-riding on the part of producers and importers, binding arrangements and agreements are needed, such as we have seen within the packaging sector and with battery recycling.

Both internationally and locally, businesses and wider communities have an important role. The growth of social media and networking platforms can be used to support the development and co-ordination of communities’ activities and their interactions with corporations and government as they respond to new circular economy policies and actions.

Businesses know that they must listen to their consumers. Companies such as Apple and Google want loyal users of their complete product ecosystems, including back service and recycling. The efforts of big companies like these to enter other domains such as the automotive sector signal a move to product-service oriented models and vertical chain management.

Public support is therefore the final, indispensable precondition for circularity that I would highlight. As they face up to the inevitable dilemmas and trade-offs of the transition, governments and producers must make conscious, careful choices that are made in ways that increase public support – including for measures with serious financial consequences.

Shared responsibility also requires that citizens take part in resource chain management. Source separation, essential for high quality recycling, is one example; so are lifetime extension and shared use of products such as cars. Sometimes, monetary incentives may be useful for encouraging citizens’ collaboration.

Changing the system

Even with all of these preconditions in place, operational challenges and socioeconomic risk factors will need to be faced. We must close loops in many different areas. We also must develop new technologies and renewable energy sources, create new value, design effective business models, and share responsibility to achieve a real circular transition.

We furthermore need to resolve the dilemmas that arise from necessary and interconnected choices, including the development of international value indications, and to repair resource leaks caused by factors such as stigmatization and market failure. While stigmatization can be prevented by certification procedures and material passports, developing international value indicators is difficult: at present, only financial values count, so international coordination of fiscal measures is needed to prevent leaks.

With realistic, shared goals that respect natural laws, systematic thought and action from government and all parties involved in resource chain management – guided by the waste hierarchy – has the capacity to create a circular economy.

Featured image: Berit (CC BY 2.0), via Wikimedia Commons