THE CANVAS

AN INTRODUCTION TO CIRCULAR ECONOMY

KEN WEBSTER AND LAURA F. HENAO

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 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:

“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

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. 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

Linear to Circular + Money as Credit. Source: Ken Webster based on Cradle to Cradle by W. McDonough and M. Braungart.

have to be about creating and circulating value rather than extracting it. The circular economy does have a very clear repositioning when it comes to materials, however. Materials must be seen as ‘nutrients’, as food for the system. There are two main pathways. Everything for which order can be rebuilt through the biosphere is distinguished from materials created by human artifice, for which order has to be recreated through human enterprise. These human-created materials must remain in a ‘technosphere’ since, within the biosphere, they are most often contaminants. In both pathways, entropy increases, but in the biosphere, these materials are called ‘products of consumption’. They are not just used but progressively used up as decay sets in and molecular chains are broken down. From tree to board to sawdust and soils: a cascading downward flow towards disorder. By contrast, durable materials in the technosphere become products of service. They are not typically used up during their use. They are, well, durable! What they offer is a service over time and the emphasis is on extended product life or design for disassembly and recovery – keeping the item at its highest value. Immediately, one can appreciate that cheap single-use plastics are a disaster because they are durables designed to be products of consumption – and it doesn’t work. It's the wrong material for the job. The genius of the cradle to cradle approach was – and still is – in working through the thinking to give a powerful ‘first principles’ approach. The circular economy as a lens through which to see the world: systems orientated, logical, flexible in application, and designed for systemic fit. Two further key insights unfold from the logic at this point. The first is that, for naïve commentators, a linear economy is often seen as a mechanical pipework system and, therefore, they believe we can create a circular economy by hammering the pipe into a closed loop. The classic recycling assumption – take the waste and renew it. It’s one heck of a job. But in nature, very few animals eat their own excrement and certainly not as a means of sustenance. The excrement is food for a million other lifeforms, from fungi to bacteria,

Design for Disassembly

As an architect and designer, McDonough has exemplified a design for disassembly and recovery approach in Park 20|20, Amsterdam, the ‘first full-service Cradle to Cradle office park in the world.’ It also used three touchstones for creative and operational purposes: ‘waste equals food’, ‘use solar income’ and ‘celebrate diversity’ to create a number of practical and symbiotic circular solutions, including an Elevator as a Service initiative for the multi-tenant NOW building.5

Design ambitions for the NOW Building Park 20|20, Amsterdam. Source: W. Mcdonough and Partners (2014).

Zero-Waste Singapore

Faced with limited space and a seven-fold increase in the amount of waste generated in the territory over the last 40 years, the Zero-Waste Masterplan released in 2019 will have far-reaching impacts on city functioning and design. Landfill waste is to be cut by 30%. The already successful closing of the water loop (NEWater) and the recycling of waste and metals from construction is to be joined by priorities around food, e-waste and packaging. If ‘waste is food’, then designing for industrial symbiosis, as in the Jurong chemical park and more generally, must involve processing and cascading materials into new uses as new resources, drawing on insights from living systems. Waste becomes less about hygiene challenges and more about infrastructure-dependent resource opportunities. Subsidiarity is also key: anything that can be managed locally and efficiently should be – just as cells in the animal body deal with immediate exchanges of energy and materials. Turning food waste into compost is one example. Infrastructures can also include spaces for repair ‘cafes’ in some street-food centres, donation stations to encourage reuse, and potentially, spaces for temporary storage. A circular economy is stock management orientated, and slowing the flow through the system calls for ‘buffer’ zones to allow access over an extended period of time. Efficiency is replaced by effectiveness in optimising the whole system.6

“A circular economy is regenerative by design and aims to gradually decouple growth from the consumption of finite resources.”

and there is a clearly evolved system to benefit from it. Waste is indeed food, but usually for the system, not the originator. And if the product is in the technosphere, then the first approach is extended product life (maintain the embedded energy and materials in good order and only deconstruct it into molecules as a secondary option). Walter Stahel talks about the Era of ‘R’ (refurbish, repair, reuse etc.) followed by the Era of ‘D’ (delamination, depolymerisation etc.). He then complements this with ideas of total product liability – in other words, the end-of-life responsibility lies with the originator or manufacturer. Is the idea of a chain of responsibility from ‘cradle to cradle’ coming to a city near you? Let’s hope so, one day. The second insight is the role of capitals. So much of life is regenerated in the soils. Today's cities are home to civilisations and cultures, all an important source of social capital. The circular economy expressly focuses on stock maintenance and increase, from which flows of goods and services can be derived but also designed to be nourishing to the stock. Throughput is not a measure of wealth, nor is financial return on investment, but the increasing stock of ‘solutions’ that society can deploy for the individuals and communities within its boundaries and hinterlands over the long term, is.

Conclusion

The circular economy could be part of a profound reorientation of economic thinking. Or it could be this year’s slogan. At its best, it takes a systems-based perspective founded on feedback-rich systems rather than mechanical systems. It is about effective systems, not just efficient ones – it seeks to optimise the whole, not just a part. It emphasises design-for-system-fit more than waste management or the ‘hygienic’ cleaning up of waste. It demands enabling conditions that reflect the full cost of materials and energy to stimulate different business models and trajectories and the creation of value chains that provide a chain of responsibility for resources. We will see more material data management for what are indeed valuable resources. And economic growth? If growth is no longer a measure of throughput but of increased well-being, then there will be economic growth, but not as we know it. Those days are gone, and much better days await us.