AN INTRODUCTION TO CIRCULAR ECONOMY
AN INTRODUCTION TO CIRCULAR ECONOMY KEN WEBSTER AND LAURA F. HENAO
Ken Webster is the Director of IS4CE (International Society for Circular Economy), the former Head of Innovation at the Ellen MacArthur Foundation (2010-2018) (UK) and a Visiting Fellow at Cranfield University. He is the author of Circular Economy, A Wealth of Flows (2017). Laura F. Henao is the Learning Engagement Manager for the Ellen MacArthur Foundation. Note: Ken and Laura are writing in a personal capacity.
This short introduction doesn’t start with buildings or even cities; it starts with the idea that a circular economy in its most profound form is a ‘lens’. It’s a way of seeing the world rather than a toolbox of business models and technologies, despite it being incredibly practical in that latter role. And, if it is about such an overview, then it's comforting to know much circular-economy thinking derives from the work of architects and designers. In this article, William McDonough and Walter Stahel will provide our touchstones, and Singapore will serve as an illuminative case study. The notion of a circular economy at one level is really very simple; it’s intuitive. When it comes to resources, we're riding a linear takemake-dispose economic system. It’s been great; a generous portion of a very populous humanity has never lived so well or so long as they have in the post-World War II era. ‘Cheap’ energy and materials, slick technologies built on a growing knowledge base, available credit, and growing trade internationalisation set against growing demand. What could possibly go wrong? Unfortunately, a few things. For example, if the economy is based on extracting natural and social capital, but the accumulated financial capital cannot stimulate a perfect substitute for what has been degraded. Or if the degradation has moved the overall system into a transitional phase (climate destabilisation being a prime example here). The generalised myth is that, of course, human ingenuity can fix any problem encountered The canvas
while economic growth continues. Therefore, when it comes to decoupling resource use from growth, if we can close the loop on products, components and materials while taking consumers and customers with us as we shift to renewable energies and efficiency, what we have is a circular economy rather than a linear one! Intuitive, reassuringly mainstream, and as Walter Stahel says, “an economic opportunity driven by innovation”. Here is how the Ellen MacArthur Foundation describes it:
costs, existing material handling and categorisation systems, the design of buildings or districts that can and do reflect the conditions in which a take-make-dispose approach thrives. Still, the idea of “buildings like trees and cities like forests” (McDonough) gives us a glimpse of what we could achieve if an eco-effective, materials-as-nutrients approach could indeed become a reality. We need to think ‘organism within ecology’ rather than ‘sell and forget’. A circular economy as ecology internalises the costs as benefits. An illustration of a comprehensive approach at a city level can be found in Singapore (see diagram). Another worm in the apple is the use of the term ‘regenerative by design’. It looks harmless, but since a linear economy is based on transforming natural and social capital into financial and economic capital (by degenerating and extracting), where on earth does a capital rebuilding exercise fit in? It certainly needs to fit in a circular economy as a stock maintenance approach. The original quotation is “restorative and regenerative by design” and comes from Braungart and McDonough, the cradle to cradle design pioneers.
Here is my take on the cradle to cradle diagram. Their insights are more profound than many people realise. I added the role of money and debt to the diagram because I believe the question of a circular economy cannot remain solely in the rather purist hands of those who primarily want to talk materials and energy – industrial ecologists, for example – when it’s plain that if money is active, as in the role that credit plays in bringing forward production, then it has a systems-wide influence. Cheap energy and cheap credit drive economic growth, and economic growth bolsters confidence that the loans will be repaid with interest – it’s a positive feedback loop. Worse, cheap credit drives an emphasis on rising asset values, especially urban land, which jostles shoulders uncomfortably with how space is used and the purpose of buildings. It can work against the need to build localised circular economy infrastructures that are cheaper and more accessible to citizens and small businesses. No one is sure how money might work in a full-on circular economy apart from speculating that – using the living systems lens – it will obviously
“A circular economy is a systemic approach to economic development designed to benefit businesses, society, and the environment. In contrast to the ‘take-make-waste’ linear model, a circular economy is regenerative by design and aims to gradually decouple growth from the consumption of finite resources.” The worms in this apple are not too hard to find. For a start, it’s a systemic approach. It’s not a question of sprinkling a handful of digitally inspired business models, getting nodding approval at the state level and job done. Even this would be to assume the successful marketing of a slew of innovations: on-demand/sharing economy/subscription services/pre-loved furniture/‘20-in-one’ appliances/HVAC as a service, etc., will do the rest. It simply won’t. Systemic approaches usually mean adjusting the ‘rules of the game’, i.e., the relationships between the actors in the economy. The linear economy is thoroughly embedded: the price incentives, subsidies, the externalisation of 10
Linear to Circular + Money as Credit. Source: Ken Webster based on Cradle to Cradle by W. McDonough and M. Braungart. 11
Ken Webster - Laura F. Henao
