The circular economy
The circular economy orbits around the common goal of sustainable development, in order to ensure the wellbeing of our planet and its inhabitants.
Well, they say it’s new though personally I see it as an extension of how things were done 30 years or more ago.
The technicians of our childhood
If you’re older than 40 you’ll remember that, when you were a kid, if the TV broke, mom or dad called the technician. This man would come over, open the monster of a TV we all had back then, through the back and, after removed a whole lot of dust, he’d take a look around and pronounce something along the lines of –the cathode tube is broken- or “this internal fuse blew”. And he’d change the part out and be done. If it was something big, he’d take it to his shop. Or he’d tell you he’d be back with that missing part after lunch.
Either way, your television got fixed. The same way they also fixed your home appliances, your stereo and even the landline phone at home.
The broken pieces the technicians took with them, and either they’d fix those parts themselves, or they’d return them to the manufacturer so that they would refurbish them.
The process I just described is, in a nutshell, half of the circular economy. The other half, the newer one, involves having had your TV built using recycled materials to start with.
The circular economy, explained
Technically speaking, the circular economy consists in production that aims to minimize or eliminate the use of completely new resources, to maximize recycling and repurposing, and to ensure that the product is repairable; if not repairable, the emphasis passes to making sure that all components of the product are reusable or recyclable themselves. The overall focus is reducing the usage of new raw materials. It’s very distant from the current lineal production model of taking (mine, cut, etc.)/making/using/throwing away.
They say the circular economy is very good for the environment, but bad for companies. Is this true?
The resources of our planet aren’t endless, and that’s why we’ve been recycling since the 80s. The circular economy represents a logical follow-up to recycling. Back in the 80s-90s we had grumpy people and companies that didn’t want to recycle, saying it was bad for companies. It’s the same people who say now that the circular economy is bad for businesses.
Recycling is the key
Recycling wasn’t bad for the economy, although it did affect the businesses that dealt in raw materials. When paper recycling started, we started cutting down fewer tress. That affected the logging industry. However, paper and cardboard recycling made up those losses in jobs and in profits, which went to new companies. Nowadays, it’s the paper mills themselves that recycle the paper. With plastic recycling the demand for oil to that production went down, but use shifted to other types of materials. Metal recycling didn’t affect mining, as the demand for ore is constantly going up.
The recycling system was built from scratch. Its creation spurred a redistribution of labor, the creation qualified jobs at better pay. Employment went up with the recycling industry.
What it means for business today
The same thing happens now: business models need to adapt to the circular economy. Let’s use as example the light bulb. Electric engineers know how to build light bulbs that will never burn out. Some of the original light bulbs built are still burning today, over a hundred years later. While it’s true that those light bulbs use insane amounts of energy, what I mean is that there could be bulbs that didn’t break. Manufacturers just won’t make them.
The same way that Apple doesn’t want you to fix the latest iPad, so they made it impossible to open. Both want you to replace the product so they make more money.
Thankfully people and businesses are beginning to see the error of this practice. Number 12 on the Global Goals for Sustainable Development, drafted by the United Nations, and which 193 nations have agreed to pursue, reads “To guarantee sustainable consumption and production”.
And while many of them don’t boast, there are many companies –in fields that one would expect to be tough nuts to crack regarding these types of changes- introducing shifts to their production lines. The shift to a circular business model is already underway; to read about some of the cooler ones, here’s a few.
Nonetheless, cynics abound, and so do cushy business owners, who think that because their specific business models have been working out profitably for 30, 40, or 100 years, that why change?
The press can answer that very well: up till 20 years ago the only newspapers in circulation were the ones in print. Nowadays most of us read the news online: just check the printed production statistics of the last 2 decades for your favorite newspaper to see what’s happened to the 150-year old institution.
There are others who say that the circular economy cuts on the sales of new products, and that takes profits margins away from businesses.
Not long ago I spoke about the bad turn that the shift in corporate mentality of the last 30 years, a shift to caring exclusively about the bottom (profit) line. Their salaries and bonuses of the executive staff depend on profits, as do the dividends of shareholders. Therefore, they only care about that extra buck. This mentality is painfully obvious when you see companies abuse the .
Profit vs. dignified, qualified work. Or is it?
If we start building products that can be repaired, fixed, it’s true that their manufacturers’ profits will drop. However, there will be a global shift to:
- More recycling (and jobs in that field)
- Increased production made of recycled materials (this means a different type of profit, but profit nonetheless)
- More demand for qualified work (at better wages)
- Less pressure on the environment.
I don’t know you, but I like this model better. It works for everyone.
After all, nothing resists the passage of time and, if you ask the experts, the technological revolution is just starting. The Sustainable Goals are a realistic way of tackling the issues of a growing overpopulation, the need to feed them and provide them with jobs, and help them become a productive part of societies worldwide; and, to attain all this while nor destroying the planet in the process, because we depend on this Earth to feed us and provide all the resources needed for all the things to keep us all alive and thriving.
It’s our future
Ultimately, the circular economy is but one gear of a productive, sustainable machinery that aims to provide us all with a viable future; we could say that it’s a gear that shifts us to a new mentality: one that proposes to provide for today while ensuring that it will continue providing tomorrow. It’s a model that requires the education, now and in the future, of many more people, so that working for the expansion of a circular economy will raise the standard of living worldwide.
I can’t feel much sympathy for those who insist on defending the take/make/use/throw away model. I think it’s time to welcome those who bid on a future that is productive, healthy and sustainable for all, including our planet.
If you want to learn more about the Global Sustainable Goals, this is the UN official web page for them.