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November 21 to 29, 2020 is European Week for Waste Reduction! In celebration, we are republishing a previous Earth.Org piece detailing how the EU is working to reduce waste. In early March, the EU released its Circular Economy Action Plan which requires manufacturers to make products that last longer and are easier to repair, use and recycle. Taking effect in 2021, the plan is a part of the EU’s targets to become a climate-neutral economy by 2050 as outlined in its New Green Deal. How will the average consumer be affected by this plan?

The climate crisis has no borders; it affects everyone at all levels. Most Europeans agree with this. A recent Eurobarometer survey carried out in 2019 showed that 95% agree that environmental protection is important, while 91% believe that climate change is a serious problem and protective legislation is required. Policies aimed at reducing plastic waste were also widely supported. In response to this support for environmental protection, the EU Commission signalled The European Green Deal in the same month as the Eurobarometer survey. 

The EU says that global consumption of materials such as biomass, fossil fuels, metals and minerals is expected to double in the next 40 years. 

This deal aims to reset the EU’s commitments on climate change, whilst also serving as their new economic growth strategy. One of the main targets outlined in the Deal is for the EU’s economy to become climate-neutral by 2050, and the Commission hopes to achieve this through legally binding laws, social improvements, and a shift in economic growth thinking. 

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Soon after, the Commission released its proposal for the first European Climate Law which aims to write into law the goal set out in the European Green Deal- to achieve climate neutrality by 2050. With this law, all member states are required to set measures to meet this target, monitor their progress, and make the changes permanent. Hence the EU Circular Economy Action Plan was born.

What is the circular economy?

A circular economy is based on the principles of doing away with waste and pollution, keeping products and materials in use and regenerating natural systems. Under the ‘Circular Electronics Initiative’, the plan will require manufacturers of products like smartphones, tablets, laptops and other electronics to use designs and materials that allow for easy repairs, such as the use of screws instead of glue, and to include parts that are more recyclable, repairable and durable. These standards already exist for some items manufactured within the EU, like dishwashers, televisions and washing machines. 

The plan also attempts to tackle ‘throwaway culture’, by preventing planned obsolescence of products; companies like Apple have admitted intentionally making goods with a shorter lifespan to force consumers to buy a new model. Other initiatives include creating a universal charger that fits all brands of phones and an EU-wide trade-in scheme for electronics. These policies will reduce consumption of raw materials and prolong the lifetime of products. 

Consumers can also expect to receive information at the point of sale regarding a product’s lifespan, where to receive repair services, and repair manuals. This aims to address the ‘right to repair’ movement, a campaign advocating for consumers to fix their electronic items themselves and breaking the monopoly that manufacturers have over repair parts where fixing a broken part is extremely expensive or only available at the brand’s authorised outlets.

Consumers will also start to see restrictions on products that include microplastics, for example, personal care products, paints, detergents, and more. Labels will be placed on products that unintentionally release microplastics, such as tyres and woven polyester textiles, to empower consumers to make more environmentally conscious purchasing decisions. Additionally, plastic products will be required to be composed of a set amount of recycled content. 

In 2017, Europeans on average generated 172kg of packaging waste each, with 116kg being recycled. The plan will require all packaging to be reusable and reduce the complexity of materials so that it is easier to recycle by 2030. Often products are encased in packaging that has multiple layers of plastic, making it extremely difficult to recycle and ending up in landfills or incinerators. While there are options to recycle multi-layered packaged products, most of these are limited in scope or use too much energy. Sorting of these plastics becomes too complex for existing systems and the only viable solution is to reduce the material complexity at the source. 

A study says that manufacturing firms in the EU spend on average about 40% on materials; this ‘closed loop’ model can increase their profitability. 

The plan also bans the destruction of unsold durable goods, likely targeting designer brands and luxury goods, such as Burberry, which has burned £90 million of merchandise over the past five years to prevent them being stolen or sold cheaply. This change follows in the footsteps of France’s recent and similar law

Understanding the difficulty a lot of businesses and countries will likely face in adhering to this plan, the EU has pledged to provide financial and non-financial support to those who need it. 

A study estimates that applying circular economy principles across the EU may increase EU GDP by an additional 0.5% by 2030 creating around 700 000 new jobs, showing that the advantages of adopting a circular economy are not just environmental. 

The EU is making excellent strides in moving towards a circular economy, reducing intensity of resource use, promoting the use of recycled and secondary materials, and the empowerment of eco-conscious consumers. Aside from environmental benefits, consumers will enjoy more durable, reliable and protected products. The targets and legislative proposals in this action plan will need to be approved by the Members of the European Parliament before going into effect, but with increasing pressure from EU citizens, it will likely be approved. Parts of the legislation will come into effect this year and 2021.

Asia would benefit from policies such as the EU Circular Economy Plan. Rapid development and population growth has put immense pressure on the continent’s infrastructure. By 2050, the population is expected to rise to 5.3 billion people, however, as many Asian countries work to grow their economies and lift their people out of poverty, it is likely that this will not be the continent’s priority for many years to come. 

Featured image by: Klaas Brumann

As the world wrestles with the post-pandemic future, it is clear that the world order cannot follow a business-as-usual approach. As the world’s sixth mass extinction event draws nearer, more economies are beginning to embrace a ‘closed’ or a ‘circular economy’ model: notably, the EU released its Circular Economy Plan that aims to end the ‘throwaway culture’ plaguing society. To make this a reality, the very ideas of growth and consumption need to be challenged. 

The Nobel prize-winning economist Milton Friedman famously said, “The only corporate social responsibility a company has is to maximise its profits.” When such an approach drives much of the capitalist world’s business, the natural outcome is a greed-driven, consumerist society that is categorised by the depletion of natural resources, pollution and environmental degradation that has led to humanity experiencing climate tipping points that may irreversibly damage the path of civilisation as we know it.

What is a linear economy?

This economic model has been based on the so-called linear economy philosophy of ‘Take, Make, Use, and Dispose’. In such a model, the true cost of goods and services is hidden due to a lack of accounting for the cost of pollution caused to the air, water, land and sea, as well as the remaining value of the product when it is discarded. It is estimated that the cost of such so-called ‘externalities’ is a significant burden even in purely economic terms. None of the world’s leading corporations would be profitable if they were to account for the natural capital that they use.

The idea of a circular economy (CE) dates back to the 1960s when economist Kenneth Boulding discussed the adoption of a closed economy (imagining the earth to be a space ship) as opposed to the open economy we have now (also called a ‘cow-boy economy’). The ‘throwaway’ nature of the closed economy model was replaced by the ‘Make, Use and Reuse’ model, or the ‘circular economy’ model for the first time in a 1976 report by Walter Stahel and Genevieve Reday for the European Commission. 

Circular Economy: Examples

The best way to understand what a circular economy is is to examine a real-life case study. Take lighting. A lightbulb could be designed to last a lifetime but it would be unprofitable for manufacturers to do that, called ‘planned obsolescence’. Appliance company, Philips, has created a new service called “Circular Lighting,” whereby users pay only for the light, not for the equipment. Phillips will pay for the installation, performance and servicing of the lighting. At the end of the service contract, the lighting system can be upgraded and reused, or all materials and parts can be returned for repurposing or recycling, minimising materials and waste and forcing the manufacturer to take responsibility for the entire life cycle of the product. 

Apple is another example of a company embracing circular economy principles. The company announced in 2017 that it would be making new iPhones, iMacs, and other products from 100% recycled materials. The company currently has a scheme where customers can bring in their old products to get a discount on an upgrade- it estimates that up to a third of those coming into an Apple Store to purchase a new phone are trading in an old one. 

Around 44.7 million tons of e-waste was generated globally in 2016, of which 435 000 tons were mobile phones.

The EU is enshrining the principles of a closed economy into its laws; in early March, the EU released its Circular Economy Action Plan which requires manufacturers to make products that last longer and are easier to repair, use and recycle. Taking effect in 2021, the plan is a part of the EU’s targets to become a climate-neutral economy by 2050 as outlined in its New Green Deal. 

Currently, we are dependent on linear industrial processes where we use finite natural resources to create products with a limited service life that end up in landfills or incinerators. A circular economy is inspired by living systems like organisms that process nutrients that can eventually be fed back into the production cycle. Biomimicry, ‘cradle to cradle’ instead of ‘cradle to grave’,  closed-loop, or regenerative are some of the other terms usually associated with it. 

In 2018, the World Economic Forum (WEF), World Resources Institute (WRI), Philips, the United Nations Environment Programme (UNEP) and other partners launched the Platform for Accelerating the Circular Economy (PACE) to scale up circular economy innovations. PACE has three focus areas: blended finance (especially for developing countries), policy frameworks, and public-private partnerships. Global corporations like IKEA, Coca-Cola and Alphabet Inc., along with the governments of Denmark, The Netherlands, Finland, Rwanda, UAE, and China, among others, are members of PACE. China’s 11th Five-Year Plan included the promotion of a circular economy as a national policy beginning in 2006. 

The British Standards Institution (BSI) developed and published the first standard for a CE in 2016. A report by McKinsey titled “Towards the Circular Economy: Economic and Business Rationale for an Accelerated Transition” has identified significant benefits of implementing a circular economy model across the EU, including net materials cost savings worth up to US$630 billion annually in the manufacturing sector alone.  

A circular economy can also contribute to meeting the emission reduction goals of the Paris Agreement. An analysis by Ecofys and Circle Economy estimates that circular economy strategies can reduce the gap between current commitments and business as usual by about half. 

The Doughnut Model

While a circular economy model can serve as a great model for a progressive economic and business framework, the world needs a broader approach that integrates complex socio-political ideologies that often drives the preference of economical models. In recent times, it has become increasingly clear that a free market-driven open-ended growth model is unsustainable and is the primary driver of global heating leading to the ecological breakdown and climate crisis. In 2012, Kate Raworth, a senior research associate at Oxford University introduced the idea of a Doughnut Economy that aims to make human welfare the basis of economic policy rather than the all-pervading pursuit of Gross Domestic Product (GDP) growth. 

circular economy model
Source: Kate Raworth

Economic welfare was defined as per the Sustainable Development Goals (SDGs) that provide a set of minimum living standards by the UN for every human being. She extended the basic circular flow of money and goods model of economics by adding the nine planetary boundaries (environmental limits imposed by the planet) on the outside and social boundary consisting of SDGs on the inside – forming a doughnut. In this model, economic progress is measured in terms of the balance between human wellbeing and protection of the life support systems provided by the planet, thus mitigating global warming, ecological break-down and climate change. Since its introduction, this post-growth economic thinking has attracted the attention of a range of actors ranging from the UN General Assembly to Occupy the London movement. As many countries start re-examining prevalent strategies and economic policies in light of the current COVID-19 pandemic, the foundations of the Doughnut Model are being explored for the long-term planning and policy development of cities like Amsterdam

Sharon Ede, co-founder of the Post-Growth Institute, writes, “A truly circular economy would mean that the circular ethos is also reflected in our social systems, including our financial services, our business structures, and the political frameworks and cultural norms that influence human behavior.” Humanity needs to move away from consuming in excess and shift to consuming only that which is necessary to exist.

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