The challenges of creating a circular economy
At the recently concluded virtual version of the World Economic Forum’s annual meeting, many debates and discussions centered on the concept of circular economies. This phrase has lately also been doing the rounds in corporate boardrooms, shareholder meetings and, of course, environment-focused jamborees. Stripped down to basics, a circular economy is highly efficient and involves extensive recycling. It uses a closed loop to keep using and reusing the same resources for as long as is economically and practically possible. The concept has picked up a fair amount of momentum, at least in Western economies, and several events have been organized to promote the concept.
Companies like talking about circular economies as it helps them earn carbon credits and, perhaps more importantly, brownie points with environmental activists and ecologically aware consumers.
The proponents of a circular economy say that reusing primary natural resources right through their life cycle helps the environment by cutting the demand for non-renewable products like metals, chemicals, coal and oil. However, this concept is not truly environmentally friendly.
The recycling of products is itself a very large drain on natural resources and a major cause of pollution, as it involves transporting used products, sorting them, and then recycling them to produce another usable product. At every stage of production and recycling, enormous amounts of energy are consumed, making for a large carbon footprint.
Moreover, as has been shown with plastics, recycling is largely a myth, as only a minute fraction of all recyclable products actually get recycled. Each year, 1.3 billion tons of waste are produced, or about 200 kg of waste per person per year. This is far more than the capacity of the global recycling industry, leading to a large amount of waste products being incinerated, thrown into landfill or discarded in bodies of water. Scientists say that microplastics, one of the biggest causes of pollution, are found in every corner of the world.
A large chunk of the waste from rich countries is also shipped to third countries, mainly the poorest nations, where it is either dumped or sorted in extremely hazardous conditions. Mankind’s large-scale and ever-rising wasteful consumption has led to unsustainable levels of extraction of natural resources. A report by the OECD stated that the flow of materials through acquisition, transportation, processing, manufacturing, use and disposal is responsible for about 50 percent of greenhouse gas emissions worldwide. The international resource panel of the UN expects the use of natural resources to more than double by 2050.
The key aspect that is never really talked of in terms of the circular economy is cutting down the production and consumption of goods and ending wasteful consumer behavior. Production and distribution networks need to be reviewed and redesigned in order to ensure that, instead of using hard-sell tactics, companies begin promoting responsible consumption and minimalistic behavior among consumers.
A report in the Journal of Industrial Ecology concluded that a circular economy can actually increase overall production and, thus, partially or fully offset the benefits.
One of the ways to tackle wasteful consumption and promote a truly circular economy is by encouraging and incentivizing consumers to fully participate in the idea. This involves seemingly small sacrifices in consumer behavior, such as using linen bags and glass bottles and buying loose grains and other materials, thus eliminating or at least limiting the use of packaging, which tends to be mainly plastic.
This would cause some degree of inconvenience to the consumer, as almost the entire world has been hooked on plastic packaging for decades, mainly due to the flexibility and all-pervasiveness of plastics. Here, companies need to play a lead role in convincing and incentivizing consumers to switch to recycled products or renewable alternatives, even if it causes them some inconvenience.
Besides changing consumer behavior patterns, the big challenge for companies will be to change their own approach toward recycling and commit to a truly circular economy. Take plastics as an example. Most manufacturers using plastics or other recyclable materials don’t put the necessary investment into creating a complete cycle with high levels of efficiency in terms of converting plastic waste into new products of similar quality to the original.
Companies need to play a lead role in convincing and incentivizing consumers to switch to recycled products.
Ranvir S. Nayar
Currently, most plastic products collected for recycling are shredded and reprocessed into products of much lower quality, and hence meant for lower-value applications. For example, a plastic Coca-Cola bottle should ideally be recycled into another identical bottle. However, most food-grade plastics end up getting converted into plastic fiber for the manufacture of polyester carpets. Only about 2 percent of recycled products are turned into something similar to their original.
It will require a strong and well-monitored approach by governments, with a mix of carrot and stick, to push companies into making the investments needed to ensure that recycling is handled well and leads to a significant change in approach toward a circular economy. It needs better technology for the manufacture of virgin plastic and, of course, better recycling to ensure there is no significant loss in quality for a reasonable number of recycles if we are to see a genuinely circular economy.
- Ranvir S. Nayar is managing editor of Media India Group.