The Case for a Circular Economy: Looking Beyond the ‘Take-Make-Waste’ Approach
Let’s start with the obvious.
The food we eat, the goods we purchase, and the packaging used… all these have costs like deforestation and the depletion of marine resources. Inclusive and innovative, and climate-informed development may not only significantly reduce the vulnerability, but provide new opportunities for empowerment and well-being. The climate crisis and environmental degradation are among the main reasons for the delay in overcoming poverty at the global level.
Imagine: just 100 companies are responsible for 71% of global emissions. What is disheartening is the poor and other vulnerable groups contribute the least to climate change (e.g. Greenhouse gas emissions) but are the ones who suffer the most from climate change and its consequences. According to the World Bank, by 2030 the climate crisis could force an additional 100 million people into extreme poverty. However, the level of risk is dependent on our choices.
To address the challenges and use the opportunities, in partnership with the Swedish International Development Cooperation Agency (Sida) and other implementing partners, Helvetas is leading an ambitious regional initiative, Reconomy, in 12 countries in Eastern Europe, South Caucasus, and the Western Balkans.
Economic and environmental value addition: a competing objective?
Meeting environment and climate objectives and achieving sustainable economic development enhance societal and economic resilience, improve productivity, and in parallel with other policy reforms, contribute to reducing inequalities. For this to happen, reforms are needed in climate-consistent, growth-enhancing policies – through mobilizing investment in low-carbon, climate-resilient infrastructures, and technologies.
For Reconomy, environment and climate change and inclusive economic development aren’t competing objectives. Dealing with both generates a ‘double dividend’: decarbonizing the economy and leading to inclusive economic development. This in practice means that economic development needs to focus on poverty and inequality as well as on social and environmental sustainability.
In other words, the transition to a green economy should involve the following:
- Expand green production, processing, and consumption;
- Increase resource efficiency through sustainable economic activity and eco-innovation, such as new business opportunities and competitiveness;
- Increase reliance on low-carbon energy supply to mitigate climate change;
- Enhance access to green finance and expand the ESG investing; and
- Ensure the integration of accounting and disclosure of climate risks into the policies and practices of regulators, banks, investment agencies, and businesses.
Circular Economy – the 6R rule
A circular economy isn’t simply recycling.
The new iPhone 12 is out. Another one will come out next year. To grow, we need to change our mindsets regarding industrial design and cycle. We produce most items with an expiry date: like iPhone 12 and other household goods which require frequent maintenance once the warranty period ends. The attitude of producing high-quality items, extending their lifespan, and repairing them in case they fail is at the heart of the circular economy. Its golden rule is: Rethink, Refuse, Reduce, Reuse, Repair, and Recycle. This is the so-called 6R rule.
The European Green Deal places emphasis on circular economy and how it is an inevitable element to form a fair and prosperous society. A circular economy is an approach to industrial and consumption systems that shifts from linear models to circular ones, returning what comes from nature to the production cycle.
Let us take the waste management policy.
In many countries of Eastern Europe, South Caucuses, and Western Balkans, waste management is outdated. This leads to missed opportunities from secondary raw materials because of insufficient treatment and reuse of waste. Often, there are operational problems in the cooperation between public and private companies.
Another example is the design and fashion industry.
There is certainly a need for more financial investment and new competitiveness criteria, as well as research on how businesses improve infrastructure and solve the new industrial design process. There are already some innovative start-ups that are paving the way to a circular economy. One of these is DYVÓ, a local design collective from Kosovo. The designers employed at the collective produce jewelry and accessories made of waste.
It isn’t for the first time that the fashion sector turned to deadstock fabrics or waste to show how eco-conscious they are. According to Ellen MacArthur Foundation’s Report from 2017, ‘more than USD 500 billion of value is lost every year due to clothing underutilization and the lack of recycling.’ Fashion upcycling has become a trend addressing not only the problem of textiles on a landfill but also plastic pollution. McKinsey’s newly published research shows that the annual volume of greenhouse gas emissions produced by the global fashion industry is comparable to the combined annual emissions of France, Germany, and the United Kingdom.
Some companies are using car tires and belts to produce backpacks. In 2018, during COP24 in Katowice, fashion companies launched the Fashion Industry Charter for Climate Action which contains the vision to achieve net-zero emissions by 2050. The Charter is supported by the world’s largest companies, including Inditex and H&M Group, and is focused on the transition from ‘business-as-usual’ to climate-friendly approaches in material production and processing, minimizing waste, logistics, and so on. Nevertheless, in Eastern Europe and the Western Balkans, there’s still a lot of space for enhancing the alignment with global tendencies in decarbonizing the ways of doing business.
Opportunities for turning the tide
By supporting such innovative, eco-friendly initiatives, Reconomy can stimulate demand for a better system. One of our workstreams is advocacy, which could then be used to influence national actors to create louder responses and push roadmaps in place.
Slovenia, for instance, placed the circular economy as one of its strategic development priorities. The transition from the linear ‘take-make-dispose’ model to the circular economy is a process that started already in 2016 with a Partnership for Slovenia’s Green Economy. The roadmap is based on three aspects: business models, government policies, and the role of citizens. Economic growth is closely linked to increases in the use of resources.
Thus, it is important to encourage modular product design to change patterns of consumption. This should focus on public-private partnerships. Slovenia has already set in place Strategic and Innovation Partnership (SRIP) – Networks which provide a framework for collaboration. It currently has 75 members, among them many businesses and NGOs.
The 12 countries in the region don’t have big multinational companies that export final products. Rather, companies are mostly suppliers, and as such, they are sensitive to new trends, including the implementation of the principles of the circular economy in large multinational companies. The priority thus should be enabling them to ensure cost-efficient and secure natural resources for all their needs.
Also, countries cannot afford to watch and wait to see what will happen in the global market. They have to be proactive. A systemic approach is needed. Slovenia is a good example of what dedication and commitment can bring to the political discourse when there is political will. It can be a straightforward process once the right procedures are put in place.