What is the Circular Economy?

Environmentalists need to refocus their efforts and imagination towards discovering the broad array of skills and technologies to bring to birth a circular economy in which a massive improvement in the efficient use of all kinds of resources squares the circle between prosperity and responsible environmental stewardship. Politicians have a task in front of them: to put in place policies to prioritize the discovery of circular economics, to deliver the practical hope which current 'environmental' policies do not and cannot.

The failure of decades' worth of political effort, billions of dollars of taxpayers' money, and uncounted hours of labour of mind and hand, endless propaganda efforts have failed even to moderate the acceleration of CO2 atmospheric concentrations into a steady rise. If rising CO2 concentrations result in rising global temperatures - and there are both a priori reasons to expect it might, and rising measured temperatures which suggest it is - then environmentalists are bound by duty, ethics, and reason, to act on this reality. 'One more push' on CO2 emissions definitively isn't going to fix the problem. The current insistence on ever-more stringent measures to minimise or even eliminate CO2 emissions is, in environmental terms, worthless. Worse than worthless, actually, because it is displacement activity.

If we are going to stand a chance of stabilizing global environmental damage from human's economic activity, we have to accept two things:

First, although human beings will accept lower standards of living temporarily when they are fighting for survival, they never do so voluntarily and permanently. 'Plans' which demand this are not really plans, because they will certainly fail.

Second, our current system of design, production, distribution of goods and services will continue to impose rising global environmental costs.

The idea of a circular economy is a response to these hard truths: it is a thought-experiment in which design, production and distribution are developed together in a way which minimises, or eliminates, end-waste, and conceives of all by-products of design, production and distribution of a single product being inputs into other products or services. It is not, then, identical with mass-recycling, although recycling will be a subset of the ideas within the circular economy Venn diagram.

One of the attractions of the circular economy is that it is, in theory, not merely compatible with free-market economics, but is also compatible with sustained growth in output and rising prosperity. Indeed, there's no reason why it should not be immensely profitable. It is, after all, a way of discovering the most efficient use possible of the broad spectrum of resources. (Consider, for example, how Elon Musk's development of re-usable rocketry is changing the space industry.) My personal expectation is that whichever country discovers it will lead the next real industrial revolution.

The chief drawback, however, is precisely that its development can only be holistic, with vertical and horizontal linkages in economic processes not replaced, but augmented, by universal circular linkages. Single companies or single projects on their own, then, are by definition, incapable of developing or discovering 'circular economics', with the result that their efforts collapse into merely advanced recycling, which may or more likely may not, be sufficiently profitable to encourage emulation.

What is needed is a dedicated Circular Economy special economic zone sufficiently big to allow the discovery of the necessary circular linkages between design, production and distribution.

This process of discovery does not necessarily need to invent new skills or technologies (though these will almost certainly be discovered). Rather, it initially and crucially involves the re-purposing of skills and technologies already available. For example, consider the role of finance. The technologies for recycling waste plastics have already been developed and they are capable of turning an ever-broadening spectrum of waste plastics into the colour-neutral pellets which are the standard feedstock for the plastics industry. This is plainly very good news. So what is holding back the collosal expansion of this industry? Well, one overwhelming problem is that there is no guaranteed supply of waste plastics in the quantity and reliability of provision necessary. In this case, the development of a waste-plastics futures market is a major missing piece of the architecture needed to help deal with the world's plastics problems. In this case, circular economics could be, and should be, hugely advanced simply by organising the waste-plastics market, with warehouses, defined delivery and, of course, the essential futures market.

It requires no great leap of imagination to see that the development of futures markets for, say, various components of of electronic 'waste' could be transformative to electronics design and production.

If your imagination has embraced the argument so far, it will perhaps occur to you that it is easy to see how the re-drawn availability of supply will be likely to make its own impact on the design of new products. You can call this a 'holistic' development if you like, or you can call it a predictable result of expanded free markets. Just as the development of new technologies in coal mining went hand-in-hand with new technologies in the iron & steel industries, so we should expect the development of new futures markets in recycled inputs to go hand-in-hand with new processes and priorities in design and production. Once started, we can and should expect circular economics to be self-organizing.

My contention is that environmentalists need to refocus their campaigning efforts into encouraging government to legislate for Special Economic Zones dedicated to exploring and discovering circular economy techniques, from design to distribution. More, since the scope of discovery for circular economics is so broad, and so untapped, a Circular Economy SEZ could harness the brains and enthusiasm of a generation which is highly environmentally-aware without, at present, any channel to do anything constructive about it.